{"id":{"repo_id":"cambridge","oai_identifier":"oai:www.repository.cam.ac.uk:1810/305024"},"canonical_url":"https://search.dev.ndltd.org/etd/cambridge/oai:www.repository.cam.ac.uk:1810/305024","repository":{"repo_id":"cambridge","name":"Cambridge University","base_url":"https://api.repository.cam.ac.uk/server/oai/request"},"display":{"title":"Founders Without Limits: Dual-Class Stock and the Premium-Tier of the London Stock Exchange","abstract":"The US has recently seen a surge in the use of ‘dual-class stock’ or ‘weighted voting rights’ (WVR) by publicly-listed companies in the technology sphere. Google, Facebook and Snap, amongst others, have adopted WVR-structure where the founders own unlisted shares to which enhanced voting rights are attached, while public shareholders only hold inferior-voting shares. This can enable founders to diversify their wealth and generate equity finance without losing control. Founders can retain control only holding a minority of the equity, and take long-term decisions largely insulated from the whims of the public markets. Founders without limits. In the UK, WVR-structure is proscribed on the premium-tier, the London Stock Exchange’s most prestigious listing-tier. With a dearth of large tech-companies listing in the UK, and a plethora of acquisitions of UK tech-companies by foreign acquirors, the premium-tier prohibition of WVR-structure could be throttling the UK’s tech-industry. In this thesis, a theoretical and evidentiary approach is taken to the analysis of WVR-structure, one of the most significant topics in corporate governance today. It will be shown that a WVR-tradeoff operates, and, in certain circumstances, particularly in the context of long-term orientated, high-growth tech-companies, the structure’s benefits can outweigh the detriments to public shareholders. It will also be shown that the existing empirical evidence is not indicative of WVR-firms harming public shareholders. The market adequately protects itself from the perceived risks by imposing discounts on WVR-firms. If the prohibition of WVR-firms from the premium-tier stems from a fear that public shareholders will be harmed, given that the market prices-in its risk, the prohibition is not justified by the evidence. In fact, the level of discounts imposed on WVR-firms by the market is unwarranted by stock returns and operating performance. It is contended that if WVR-structure were to be permitted on the premium-tier, it would be prudent to implement judicious public shareholder protections, which will moderate the risks associated with the structure, and reduce the cost of capital for WVR-firms. High costs of capital could deter issuers from listing even if WVR-firms were permitted on the premium-tier. Crucially, any measures must tread a fine line between protecting public shareholders, and ensuring that restrictions are not so severe that they undermine the benefits of WVR-structure and cause founders to continue to eschew the premium-tier. A balanced protection package is proposed that provides a policy-driven roadmap toward the premium-tier finally embracing founders without limits.","abstract_html":"The US has recently seen a surge in the use of ‘dual-class stock’ or ‘weighted voting rights’ (WVR) by publicly-listed companies in the technology sphere. Google, Facebook and Snap, amongst others, have adopted WVR-structure where the founders own unlisted shares to which enhanced voting rights are attached, while public shareholders only hold inferior-voting shares. This can enable founders to diversify their wealth and generate equity finance without losing control. Founders can retain control only holding a minority of the equity, and take long-term decisions largely insulated from the whims of the public markets. Founders without limits. In the UK, WVR-structure is proscribed on the premium-tier, the London Stock Exchange’s most prestigious listing-tier. With a dearth of large tech-companies listing in the UK, and a plethora of acquisitions of UK tech-companies by foreign acquirors, the premium-tier prohibition of WVR-structure could be throttling the UK’s tech-industry. In this thesis, a theoretical and evidentiary approach is taken to the analysis of WVR-structure, one of the most significant topics in corporate governance today. It will be shown that a WVR-tradeoff operates, and, in certain circumstances, particularly in the context of long-term orientated, high-growth tech-companies, the structure’s benefits can outweigh the detriments to public shareholders. It will also be shown that the existing empirical evidence is not indicative of WVR-firms harming public shareholders. The market adequately protects itself from the perceived risks by imposing discounts on WVR-firms. If the prohibition of WVR-firms from the premium-tier stems from a fear that public shareholders will be harmed, given that the market prices-in its risk, the prohibition is not justified by the evidence. In fact, the level of discounts imposed on WVR-firms by the market is unwarranted by stock returns and operating performance. It is contended that if WVR-structure were to be permitted on the premium-tier, it would be prudent to implement judicious public shareholder protections, which will moderate the risks associated with the structure, and reduce the cost of capital for WVR-firms. High costs of capital could deter issuers from listing even if WVR-firms were permitted on the premium-tier. Crucially, any measures must tread a fine line between protecting public shareholders, and ensuring that restrictions are not so severe that they undermine the benefits of WVR-structure and cause founders to continue to eschew the premium-tier. A balanced protection package is proposed that provides a policy-driven roadmap toward the premium-tier finally embracing founders without limits.","abstract_has_math":false,"creators":["Reddy, Bobby"],"institution":"University of Cambridge","degree_name":"Doctor of Philosophy (PhD)","degree_level":"Doctoral","degree_discipline":null,"degree_department":null,"school":null,"contributors":[],"advisors":["Cheffins, Brian"],"committee_chairs":[],"committee_members":[],"year":2020,"date_issued":"2020-05-16","date_published":"2020-05-16","updated_at":"2026-07-22T22:23:57Z","subjects":["Corporate Governance","Dual-Class Stock","Capital Markets","One Share One Vote","Voting Rights","London Stock Exchange","Listing Rules","Sunset Clauses","Big Tech","Minority Shareholder Protections"],"languages":["en"],"rights":[],"rights_urls":["https://www.repository.cam.ac.uk/bitstreams/8516c5c4-79a5-46ef-a89a-6b4a52dfaede/download","https://www.rioxx.net/licenses/all-rights-reserved/"],"identifier_entries":[{"key":"dc:creator.authoridentifier","label":"Author Identifier","values":["0000000265193160"],"render_values":[{"text":"0000-0002-6519-3160","href":"https://orcid.org/0000-0002-6519-3160","code":true}]}]},"links":{"outbound_url":"https://doi.org/10.17863/CAM.52105","outbound_label":"DOI","outbound_source":"dc:identifier.doi"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["Cheffins, Brian"]},{"key":"dc:contributor.sponsor","label":"Sponsor","values":["Cambridge Faculty of Law Studentship, Wright Rogers Scholarship"]},{"key":"dc:creator","label":"Author","values":["Reddy, Bobby"]},{"key":"dc:creator.authoridentifier","label":"Author Identifier","values":["0000000265193160"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.issued","label":"Date","values":["2020-05-16"]},{"key":"dc:publisher.institution","label":"Dc Publisher Institution","values":["University of Cambridge"]},{"key":"dc:relation.isreferencedby.uri","label":"Dc Relation Isreferencedby URI","values":["https://www.repository.cam.ac.uk/handle/1810/305024"]},{"key":"dc:type","label":"Dc Type","values":["Thesis"]},{"key":"dc:type.qualificationlevel","label":"Dc Type Qualificationlevel","values":["Doctoral"]},{"key":"dc:type.qualificationname","label":"Dc Type Qualificationname","values":["Doctor of Philosophy (PhD)"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Corporate Governance","Dual-Class Stock","Capital Markets","One Share One Vote","Voting Rights","London Stock Exchange","Listing Rules","Sunset Clauses","Big Tech","Minority Shareholder Protections"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["https://www.repository.cam.ac.uk/bitstreams/8516c5c4-79a5-46ef-a89a-6b4a52dfaede/download","https://www.rioxx.net/licenses/all-rights-reserved/"]},{"key":"dc:rights.embargodate","label":"Dc Rights Embargodate","values":["2026-05-05"]},{"key":"dc:rights.embargotype","label":"Dc Rights Embargotype","values":["embargo"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.doi","label":"DOI","values":["10.17863/CAM.52105"]},{"key":"dc:identifier.uri","label":"Identifier URI","values":["https://www.repository.cam.ac.uk/bitstreams/f60762a8-94b7-42c9-8a30-d22fa6256234/download"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["The US has recently seen a surge in the use of ‘dual-class stock’ or ‘weighted voting rights’ (WVR) by publicly-listed companies in the technology sphere. 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It will be shown that a WVR-tradeoff operates, and, in certain circumstances, particularly in the context of long-term orientated, high-growth tech-companies, the structure’s benefits can outweigh the detriments to public shareholders. It will also be shown that the existing empirical evidence is not indicative of WVR-firms harming public shareholders. The market adequately protects itself from the perceived risks by imposing discounts on WVR-firms. If the prohibition of WVR-firms from the premium-tier stems from a fear that public shareholders will be harmed, given that the market prices-in its risk, the prohibition is not justified by the evidence. In fact, the level of discounts imposed on WVR-firms by the market is unwarranted by stock returns and operating performance. It is contended that if WVR-structure were to be permitted on the premium-tier, it would be prudent to implement judicious public shareholder protections, which will moderate the risks associated with the structure, and reduce the cost of capital for WVR-firms. High costs of capital could deter issuers from listing even if WVR-firms were permitted on the premium-tier. Crucially, any measures must tread a fine line between protecting public shareholders, and ensuring that restrictions are not so severe that they undermine the benefits of WVR-structure and cause founders to continue to eschew the premium-tier. 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It will be shown that a WVR-tradeoff operates, and, in certain circumstances, particularly in the context of long-term orientated, high-growth tech-companies, the structure’s benefits can outweigh the detriments to public shareholders. It will also be shown that the existing empirical evidence is not indicative of WVR-firms harming public shareholders. The market adequately protects itself from the perceived risks by imposing discounts on WVR-firms. If the prohibition of WVR-firms from the premium-tier stems from a fear that public shareholders will be harmed, given that the market prices-in its risk, the prohibition is not justified by the evidence. In fact, the level of discounts imposed on WVR-firms by the market is unwarranted by stock returns and operating performance. 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