Multiple Class shares / tracking stocks

Can anyone in the forum think of another type of security that dual listed shares with multiple voting rights classes?

Thought that this would be an interesting topic to explore. Hopefully some experts can comment.

3 Comments
 

Take a look at Liberty Media Corporation. It just issued 3 tracking stocks all with 3 classes of stock with varying voting rights.

You see the multi class shares in family controlled companies or tech IPOs where the founder remains the CEO (FB, GOOG, TEAM). Trackers are pretty rare unless an unusual circumstance arises. The only person who has consistently uses them is John Malone.

 

Can't think of another security that mimics a tracking stock but I'd almost liken it to a derivative product.

From my understanding they're somewhat uncommon and typically used as a form of remuneration to incentivise managers of firms with multiple divisions. Classic example is the case where a manager is in charge of a particular division but is paid in shares of the consolidated entity. The manager's division may not have enough bearing on the consolidated performance of the company to incentivise him/her to "work hard".

Creating a tracking stock for this division overcomes the issue but you'd probably need some sort of liquidity mechanism to give it any value.

 

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