Snap Inc. cofounder and CEO Evan Spiegel is determined to maintain control over the company he started, even after taking it public. Investors who buy in to Snap’s $3 billion public offering will get Class A shares, but no voting rights—an IPO first.
In response, the Financial Times reports (paywall), U.S. pension funds “have reacted with fury.” Today they plan to send a public letter objecting to Snap’s governance structure, in part out of concern that the unprecedented arrangement will encourage other founders to emulate Spiegel’s example.
Spiegel and his cofounder, Snap’s prospectus asserts, “have the ability to control the outcome of all matters submitted to our stockholders for approval.” Moreover, the ability to exercise that control would not change if either executive were to be terminated. Even if Spiegel dies, the Class A shareholders created by Snap’s IPO will have no greater say in the company’s management and strategy.