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29 July 2025
Jack Grogan-Fenn
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July 29, 2025
The US House of Representatives has overwhelmingly voted in favour of the Enhancing Multi-Class Share Disclosures Act, which would offer shareholders deeper information on dual-class share structures (DCSS).
The act, also known as H.R. 3357, was backed by 381 members of the House, with the 92% total support significantly higher than the two-thirds minimum it required to pass. It has now been received by the US Senate and referred to the Committee on Banking, Housing, and Urban Affairs.
If approved, the bill would require issuers of securities with multi-class share structures, also known as DCSS, to disclose information about the shares of all classes of securities owned by and the voting power of particular shareholders specified in the bill to all investors in a company.
H.R. 3357 received strong bipartisan support, comprising 205 votes from Democrats and 176 from Republicans. Only 31 Republican votes were cast against the bill, underscoring the importance of addressing the issue of DCSS across the political spectrum.
Under H.R. 3357, issuers must disclose certain information about each director, director nominee, named executive officer, and each beneficial owner of securities with 5% or more of the total combined voting power of all classes of securities entitled to vote in the election of directors.
Specifically, the issuer must disclose the number of shares of all classes of securities entitled to vote in the election of directors beneficially owned by such person, and the amount of voting power held by such person.
The US House Committee on Financial Services Chair French Hill was one of the many Republicans to support H.R. 3357. Ahead of the House’s vote on the bill, he said that while DCSS are “important for certain business models like family businesses”, they also “raise questions about transparency and shareholder rights”.
“Since this information is not required to be disclosed, shareholders might not always understand how control is concentrated within a public company,” said Hill. “[This] bill right-sizes this issue by requiring companies to provide clear information about voting power, especially where insiders and significant shareholders share outsized influence.”
DCSS creates separate classes of shares with different voting powers, widely referred to as Class A and Class B shares. These separate shares often give founders and senior figures at companies greater control and restrict the influence that shareholders can have.
Sometimes DCSS are subject to additional protections for minority shareholders, such as sunset clauses which see companies revert to single-class share structures after a certain period.
Multi-class share structures are a controversial issue in the eyes of many shareholders and there are currently no sunset clause rules for DCSS in the US. This is despite institutional investor groups such as the Council of Institutional Investors advocating for ‘one-share, one-vote’ as a bedrock principle of good corporate governance.
Investors are increasingly pressing for the disclosure of voting results disaggregated by capital class. This would make clear what minority investor support for resolutions are, offering data that excludes votes from controlling shareholders that benefit from superior voting rights.
Last year, the Council of Institutional Investors updated its corporate governance policies to recommend that companies with multiple share classes should “supplement their final results with tallies for each class”.
Additionally, whilst companies with DCSS often face shareholder proposals requesting recapitalisation to a one-share one-vote structure, proposals asking for the disclosure of disaggregated voting results are becoming increasingly prominent.
Notably, tech giant Meta faced both a shareholder proposal asking for the elimination of its DCSS in favour of one-share one-vote and another asking the Board to disclose voting results based on class type at its 2025 AGM.
Whilst the proposal seeking disaggregated voting results disclosure only received 25.8% votes in favour, founder Mark Zuckerberg wields around 61% of the voting rights at the company due to the DCSS structure. When excluding his voting power, the proposal received majority support from independent minority shareholders.
Disaggregated voting disclosure would offer several benefits, including clarifying to what extent the preferences of the controlling shareholders are consistent with the preferences of minority shareholders. It would also offer greater transparency on voting results, with calculating how minority and controlling shareholders voted currently challenging and class-by-class disclosure not yet required.
Last week, Minerva Analytics reported that the co-founder and ex-CEO of FinTech company Wise, Taavet Hinrikus, had urged shareholders to vote against plans extending its DCSS by a decade as part of a plan to shift its primary listing to the US from the UK.
According to reports from Sky News, Hinrikus intended to ask proxy advisors to recommend that shareholders vote against the proposal to lengthen the sunset period for the firm’s DCSS. Wise is looking to shift its primary listing to the New York Stock Exchange, triggering discussions over stretching its DCSS to 2036 to entice investment.
However, Wise’s shareholders this week voted in favour of the company transferring its primary listing to the US, increasing the likelihood of the firm extending its DCSS. Wise expects the transfer to become effective in Q2 2026.
More than 90% of the company’s Class A shareholders backed the move, while 85% of its Class B shareholders – which hold superior voting rights under the DCSS – supported it. Wise’s Class B shares represent 90% of the company’s total voting rights.
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