You are using an older browser version. Please use a supported version for the best MSN experience.

The 10 Least Shareholder-Friendly Stocks

Kiplinger Logo By James Brumley, Contributing Writer, Kiplinger.com of Kiplinger | Slide 1 of 11: <p>Facebook (<a href="http://portal.kiplinger.com/tfn/index.php?ticker=FB&page=stockTipsheet" target="_blank">FB</a>) shareholders recently scored a major victory in ultimately preventing CEO Mark Zuckerberg from further consolidating shareholder voter power and claiming it for himself.</p><p>Zuckerberg’s original plan was to introduce a newly minted Facebook share class that wouldn’t grant owners any voting rights. While voting shares still would be available in the publicly traded float, this strategy would effectively dilute those shares without diluting the special class of so-called “supervoting” shares Zuckerberg already owns. Thus, the founder would effectively be able to exercise greater control over the company – even if that wasn’t the stated goal.</p><p>It was a direct victory for Facebook shareholders, but also an indirect win for investors who have grown weary of not having much say in how companies are run. Unfortunately, the problem of concentrated voting rights – rights that should be equitably controlled by shareholders – remains an all-too-common issue.</p><p>“The biggest issue here is that the management teams of these companies are effectively ‘activist-proof,’” said Charles Sizemore, CFA, of Sizemore Capital. “A Carl Icahn or Bill Ackman can’t realistically control enough of the company to agitate for change. That can be a good thing in that it allows management to focus on long-term value creation rather than short-term quarterly results. But it can also be bad in that management is free to go ‘empire building’ and use shareholder capital inefficiently with no outside pressure to stop them.”</p><p><strong>Here’s a closer look at 10 companies with shareholder-unfriendly stock structures that you should consider carefully before you make an investment. </strong>Shareholders have very little influence over them, as their founders and chiefs have secured a majority of voting power.</p><p>Data and share prices are as of Oct. 2, 2017, unless otherwise indicated. Click on symbol links in each slide for current share prices and more.</p>SEE ALSO: <a href="http://portal.kiplinger.com/slideshow/investing/T052-S001-30-great-stocks-of-all-time/index.html">30 Great Stocks of All Time</a>

The 10 Least Shareholder-Friendly Stocks

Facebook (FB) shareholders recently scored a major victory in ultimately preventing CEO Mark Zuckerberg from further consolidating shareholder voter power and claiming it for himself.

Zuckerberg’s original plan was to introduce a newly minted Facebook share class that wouldn’t grant owners any voting rights. While voting shares still would be available in the publicly traded float, this strategy would effectively dilute those shares without diluting the special class of so-called “supervoting” shares Zuckerberg already owns. Thus, the founder would effectively be able to exercise greater control over the company – even if that wasn’t the stated goal.

It was a direct victory for Facebook shareholders, but also an indirect win for investors who have grown weary of not having much say in how companies are run. Unfortunately, the problem of concentrated voting rights – rights that should be equitably controlled by shareholders – remains an all-too-common issue.

“The biggest issue here is that the management teams of these companies are effectively ‘activist-proof,’” said Charles Sizemore, CFA, of Sizemore Capital. “A Carl Icahn or Bill Ackman can’t realistically control enough of the company to agitate for change. That can be a good thing in that it allows management to focus on long-term value creation rather than short-term quarterly results. But it can also be bad in that management is free to go ‘empire building’ and use shareholder capital inefficiently with no outside pressure to stop them.”

Here’s a closer look at 10 companies with shareholder-unfriendly stock structures that you should consider carefully before you make an investment. Shareholders have very little influence over them, as their founders and chiefs have secured a majority of voting power.

Click ahead to see them.

Data and share prices are as of Oct. 2, 2017, unless otherwise indicated. Click on symbol links in each slide for current share prices and more.

SEE ALSO: 30 Great Stocks of All Time
© Getty Images

More from Kiplinger

image beaconimage beaconimage beacon