On Taxing Duties

Mark 2017 as the year that voting rights began to matter once again.  The trend began many years past with the separation of share classes, and it imagined an inevitable future in which equity ownership was docile, impotent, and utterly passive.

Exhibit A of our new dawn was the IPO of Snap’s voteless shares.  Following the observed path of its tech brethren–Google, Facebook, et al.–it tried to do one better.  Why yield public investors any votes at all?  For its youthful boldness, the index overlords exacted their punishment, thereby abandoning it to that lurking nemesis from over the sea.

Let Exhibit B be the thinly veiled boardroom battle at Uber.

And for Exhibit C, I present Liberty Tax (Nasdaq: TAX), controlled by founder and “former CEO” John Hewitt.  Amid this particular boardroom battle, Mr. Hewitt’s voting rights have afforded him delicious privilege.  Namely, the privilege to “[engage] in an array of inappropriate conduct, both personally and involving business matters, while serving as Liberty Tax’s CEO and Chairman,” and continue to control the company despite the Board’s attempts to terminate him.  In this case, when the dust ultimately settles, Liberty will have lost the service of at least four Board members and two company executives.

Take sides as you must, but do pay homage to the personal sacrifices demanded by the skirmishes of this grand conflict.

On this day may Liberty’s minority shareholders yield gratitude for John Garel’s service.

Disclosure: No position.

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