Although dual-class share structures are controversial and have long been opposed by shareholder-rights advocates, they have been growing in popularity, especially in Silicon Valley. Entrepreneurial founders are often reluctant to cede control; Facebook, Google’s parent company Alphabet and Snap are all dual-class share companies. The conflict is magnified in this instance because Ms. Redstone is the controlling shareholder in both parties to the proposed merger. Such cases are rare, because directors who dare to defy a controlling shareholder’s wishes, as the CBS directors have done, can simply be replaced. There was widespread amazement on Wall Street this week that Ms. Redstone hadn’t sensed the rebellion coming, and moved to replace the CBS directors or curtail their powers.

Source: New York Times May 17, 2018 00:00 UTC