Orrick has unveiled an unprecedented new study examining the corporate governance structures of the largest public companies in the Bay Area, including tech industry leaders. The study was led by partner Ed Batts, global leader of the firm’s M&A and private equity practice.
The comprehensive study reviewed the 153 publicly-traded companies based in the San Francisco Bay Area with market capitalizations exceeding $750 million, a unique and in-depth profile of how such companies structure themselves.
With increased attention on corporate governance from institutional and activist investors alike, the study provides a glimpse into the trends shaping corporate governance approaches. This includes a breakdown of the 22 companies with dual-class common stock structures – 16 of them technology companies. The study found, for example that about 70 percent of dual-class companies retain plurality voting, while more than 70 percent of non-dual class companies have some form of “majority voting” for directors in contested elections.
In addition, the study found that overall, exclusive forum provisions, designed to limit class action suits to a single legal jurisdiction, are surging among the majority of non-dual class common stock companies. The provisions, which almost always limit jurisdiction to the state of incorporation, such as Delaware, are a relatively new concept.
The review also explored proxy access, which remains a limited but rapidly growing practice. The Orrick team plans to expand the study in the coming year to explore the corporate governance structures of technology mid and large cap companies nationally.
Ed leads an Orrick M&A team that is widely recognized as an industry leader. The practice group advised on over 230 deals throughout 2016 for clients around the world, including U.S.-based IronPlanet, Microsoft and Pinterest, Europe-based AVG Technologies, Asia-based JD.com and Nitto Denko and France-based Thales and StudioCanal.
In addition to Ed, the Orrick team on the corporate governance study included law clerk Sara Gates, assisted by law clerks Janice Dow, Christine LaVasser, Brigid McCurdy and Ariel Winawer.
Click the image above to download the full study.