The case against the implementation of loyalty shares in Spain

• Main Author: Aurelio GURREA-MARTINEZ
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Controlling shareholders; Corporate governance; Entrenchment; Loyalty shares; Short-termism; Business Organizations Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/3708; https://ink.library.smu.edu.sg/context/sol_research/article/5666/viewcontent/the_case.pdf
• Institution: Singapore Management University

The Spanish Ministry of Economy has recently released a new bill that, among other aspects, proposes an amendment of the Spanish Companies Act to allow listed companies to adopt loyalty shares. These shares will confer additional voting rights to those shareholders staying in the corporation for at least two years. For that purpose, the company only needs to approve the adoption of loyalty shares by a qualified majority. Therefore, following the Italian (rather than the French) model of loyalty shares, the adoption of loyalty shares in Spain will be done as an opt-in rule.