Enhancing Multi-Class Share Disclosures Act

The Enhancing Multi-Class Share Disclosures Act would expand corporate disclosure requirements for issuers that have multi-class share structures (companies with two or more classes of voting shares with different voting rights). The Securities and Exchange Commission (SEC) would be required to issue rules mandating that these issuers disclose, in any proxy or consent solicitation material for an annual shareholders’ meeting (and in other filings the SEC deems appropriate), specific information about who controls voting power. For each person who is a director, a director nominee, a named executive officer, or a beneficial owner holding 5% or more of the total combined voting power, the issuer must disclose: (A) the number of voting shares they beneficially own and (B) their voting power as a percentage of the total voting power across all classes. A “multi-class share structure” is defined as a capitalization with two or more classes of securities that have different voting rights in director elections. The bill has passed the House and has been referred to the Senate.