Exclusive: SEC advisory committee to question Snap's transparency for investors
By Ross Kerber
BOSTON (Reuters) - An investor committee that advises the U.S. Securities and Exchange Commission will next week review if Snap Inc's decision to deny shareholders voting rights might also reduce the social media company's public disclosures on executive pay and other governance matters, the head of that committee told Reuters on Wednesday.
Snap, the parent of the popular messaging app Snapchat, priced its eagerly awaited initial public offering at $17 per share on Wednesday, above the expected range, giving the company a value of close to $24 billion, the richest in a U.S. tech IPO since Facebook Inc in 2012.
The IPO shares will give investors no voting rights, an unprecedented feature that has raised concerns among corporate governance leaders that other high-valuation companies may follow suit and leave investors with little say over company operations.
Snap insiders and early investors hold shares with voting rights, giving them control of the company.
For Snap, "The question becomes, since there are no common shareholders' proxy votes to do, what does that do to the level of disclosures it will have to do for annual meetings and annual reports," Kurt Schacht said in a telephone interview.
Schacht is chairman of the SEC's Investor Advisory Committee, which makes recommendations to the regulator and was set up by the 2010 Dodd-Frank financial reforms. The SEC does not have to follow its suggestions. Schacht is managing director of the CFA Institute, which accredits investment professionals.
The committee has a meeting scheduled for March 9 that will include a discussion on "unequal voting rights of common shares," according to a published agenda for the session.