The Teamsters union is pushing a plan to change Swift Transportation’s dual-class stock structure in order to give stockholders equal voting power. The company’s annual stockholder meeting will be held May 8, where the Teamsters wants Swift stockholders to vote in favor of the changes.
The company currently has two classes of stock: Class A and Class B. Class B members currently have two votes per share, while Class A stockholders have just one vote.
There are currently 87,309,116 shares of outstanding Class A common stock 52,495,236 outstanding shares of non-trading Class B common stock. Class A common stock holders represent 62 percent of Swift’s equity base.
Swift’s board opposes changing the current capital structure because it says it promotes long-term stability and has existed since the company’s initial public offering in 2010.
Dual class stock structures are not uncommon, but controversial, as shareholders hold equal economic interest but unequal voting rights.
CEO Jerry Moyes, along with family trusts and affiliates, owns almost 35 percent of the Class B and 2.2 percent of Class A shares. This allows Moyes “majority voting control despite holding a minority of outstanding shares,” the Teamsters stated.
The union notes that Institutional Shareholder Services Inc. has advocated shareholders withhold votes from incumbent audit board members for the second consecutive year.
ISS has voiced concern about what the Teamsters describe as Moyes’ “excessive pledging of stock as collateral for personal loans.” The company recommends withholding support from these independent Swift directors because audit members have a duty to protect against financial risk and conflicts of interest, the union said.