Enhancing Multi-Class Share Disclosures Act
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Would require companies with multi-class share structures — where founders or insiders hold shares with outsized voting power compared to public investors — to disclose each key insider's share ownership and voting power percentage in annual proxy materials.
By directing the SEC to write rules mandating these disclosures, the bill aims to make it easier for ordinary shareholders to understand how much voting control insiders actually hold when casting ballots at annual meetings.
What this bill would do
What it would do
The bill would amend Section 14 of the Securities Exchange Act of 1934 to require public companies with multi-class share structures to disclose specific voting-power information in their proxy or consent solicitation materials. A multi-class share structure is defined as one containing two or more types of securities with differing voting rights in director elections — a common arrangement where company founders or executives hold high-vote shares while public investors hold low- or no-vote shares. For each director, director nominee, named executive officer, and any beneficial owner controlling 5 percent or more of total combined voting power, the company would have to disclose both the percentage of outstanding shares they own and the percentage of total voting power they hold.
The bill would direct the SEC to implement these requirements through rulemaking. It does not itself restrict or restructure dual-class voting arrangements — it only requires that voting-power disparities be clearly disclosed to shareholders.
Key provisions
- 1Would direct the SEC to issue rules requiring issuers with multi-class share structures to disclose voting information in proxy or consent solicitation materials for annual shareholder meetings.
- 2Would require disclosure of the number of shares — expressed as a percentage of all outstanding shares entitled to vote — beneficially owned by each director, director nominee, named executive officer, and 5%-or-more beneficial owner.
- 3Would require disclosure of the amount of total combined voting power — expressed as a percentage — held by each such covered person.
- 4Would define 'multi-class share structure' as a capitalization structure containing two or more types of securities with differing amounts of voting rights in director elections.
Who would be affected
Public companies that have issued two or more classes of shares with different voting rights, their directors, director nominees, named executive officers, and any beneficial owner holding 5 percent or more of combined voting power. Retail and institutional investors in those companies would be the primary beneficiaries of the new disclosures.
Why it matters
Investors in dual-class companies currently may not easily see how concentrated insider voting power is relative to share ownership. If enacted, these disclosures would give shareholders a clearer picture of how much real influence they hold before voting on directors, enabling more informed decisions about board accountability and governance at companies with complex share structures.
What would change
Changes to existing law
Amends Securities Exchange Act of 1934 (15 U.S.C. 78n) (Sec. 2)
Adds a new subsection (l) to Section 14 requiring SEC rulemaking to mandate voting-power and share-ownership disclosures for multi-class issuers in proxy materials.
Agencies directed to act
Funding and costs
Congressional Budget Office estimate
CBO estimates H.R. 3357 would cost approximately $1 million over the 2025–2030 period in discretionary spending, with no effect on direct spending, revenues, or the deficit.
CBO estimates that implementing H.R. 3357 would cost about $1 million over the 2025–2030 period, reflecting the cost of roughly three SEC employees needed for about one year to issue the required rules. Because the SEC is authorized to collect fees to offset its annual appropriation, the net effect on discretionary spending (spending that requires annual congressional approval) is expected to be negligible. The bill would have no effect on direct (mandatory) spending, revenues, or the deficit in any scoring window, including the four 10-year periods beginning in 2036. CBO identified one private-sector mandate — potential increased SEC fees passed on to regulated entities — but estimated its cost would fall well below the annual UMRA threshold of $206 million; no intergovernmental mandates were identified.
How implementation would work
The SEC would be required to promulgate a rule implementing the disclosure requirement. Once the rule is in place, covered issuers would include the required disclosures in annual proxy or consent solicitation materials — or in any other filing the SEC determines appropriate. The disclosures must express both share ownership and voting power as percentages of the relevant totals. The SEC has discretion over the precise form, timing, and any additional filings beyond the annual proxy.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Official CRS summary
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Enhancing Multi-Class Share Disclosures Act
This bill requires issuers of securities with multi-class share structures to disclose certain information in any proxy solicitation or consent solicitation material. A multi-class share structure occurs when a company issues two or more classes of shares that have different voting rights. For example, a company may issue one class of shares with no or few voting rights for the public, and another class with more voting rights for company founders and executives.
Under the bill, the issuer must disclose certain information about each director, director nominee, named executive officer, and each beneficial owner of securities with 5% or more of the total combined voting power of all classes of securities entitled to vote in the election of directors. Specifically, the issuer must disclose (1) the number of shares of all classes of securities entitled to vote in the election of directors beneficially owned by such person, and (2) the amount of voting power held by such person.
Legislative subjects
Consumer affairs; Corporate finance and management; Finance and Financial Sector; Financial services and investments; Securities
Committee report
H. Rept. 119-120