Double Trouble: US Tech Firm’s Bundled Proposal Targets DCSS Extension

August 6, 2025

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By Jack Grogan-Fenn

US technology company The Trade Desk is seeking to extend the sunset trigger of its dual-class share structure (DCSS) by a decade as part of a bundled management proposal.

The resolution aims to change the date that shares of Class B common stock will automatically convert into Class A common stock and to waive jury trials for internal actions in conformity with recent Nevada law updates. This essentially combines two proposals on vastly different topics with diverging impacts into a single resolution.

Shareholders are set to vote on the proposal at a special general meeting on 17 September held by the company, which specialises in advertising and marketing technologies.

DCSS creates separate classes of shares with different voting powers, widely referred to as Class A and Class B shares. These separate shares often give founders and senior figures at companies greater control and restrict the influence that shareholders can have.

Sometimes DCSS are subject to additional protections for minority shareholders, such as sunset clauses which sees companies revert to single-class share structures after a certain time-period.

The voting rights of The Trade Desk’s Class B shares were due to revert to those of Class A shares on December 22, 2025. If approved, this proposal would see the conversion date pushed back to December 22, 2035.

“The dual class structure has protected the Company’s ability to invest boldly and stay focused on the future, not just the next earnings report,” The Trade Desk’s Schedule 14A filing read. “Looking ahead, we believe our dual class structure is more important than ever, as our board of directors and management recognise the advertising industry is at a critical juncture.”

The Trade Desk’s founder Jeff Green owns almost 98% of the company’s Class B stock. Between his Class A and Class B stock holdings, Green controls 48.4% of the company’s total voting power.

Conversely, The Trade Desk’s largest three Class A shareholders – asset managers Vanguard, Baillie Gifford and BlackRock – own a combined 23.8% of its Class A shares but only control 12.1% of total voting power at the company.

“Shareholders may be concerned that the sunset proposal will extend the sunset provision for a further ten years, which does not align with best practice of seven years or less from the date of the IPO,” Minerva Analytics’ report on the special general meeting read.

“There are growing concerns that sunset provision extensions may become a common theme among dual-class structured companies, where founders hold a significant/controlling voting right in the company and can therefore vote in favour of an extension to the conversion date with a majority vote,” it added.

The report also warned that the disparate voting power “will impact minority shareholder ability to collectively vote against the proposal if they wish to do so due to Class B shareholders being entitled to vote at the meeting without any restrictions and Green’s substantial voting rights”.

“There is a governance risk if companies with a time-based sunset provision hold a resolution to extend the conversion date when the date is near and allow holders of the class of shares with superior voting rights to vote on the extension, then the time-based sunset provision is a sunset provision in name only and will not be effective,” said Thomas Bolger, Senior Stewardship Analyst at Minerva Analytics. “In order to enhance protections for minority shareholders, it could be deemed good practice to require the extension resolution to need both the approval of the full shareholder ballot and a ballot of independent shareholders only.”

The attempt to extend the DCSS appears similar to a successful strategy by fellow tech company Wise, as reported by Minerva Analytics. Last week, Wise’s shareholders voted in favour of a proposal which combined proposals to extend the firms DCSS by a decade and transfer its primary listing to the US into a single proposal.

This was despite widely publicised calls from Wise’s co-founder and former CEO urging Wise to separate the proposals for the dual-listing and the extension of the sunset period for Class B Shares’ voting rights so they are not interconditional.

This would allow shareholders to vote against the extension of the sunset period for the DCSS while voting in favour of the dual listing in the US, or vice-versa.

It is generally considered good practice that each substantive resolution should be voteable in its own right and institutional investor guidelines discourage the bundling of two or more matters for consideration under one resolution.

Proxy advisors that recommended a vote in favour on the proposal at Wise have come into some criticism from the media for failing to sufficiently warn investors on the full implications of the resolution.

The other element of the proposal is to waive jury trials for internal actions and to allow the Company to change its registered agent and registered office within the State of Nevada from time to time in the manner provided by law. The Trade Desk reincorporated in Nevada last year, moving from Delaware.

The Trade Desk stated that these amendments “do not substantively change the rights of our stockholders and promote efficiency for the Company and our stockholders”. Shareholders are likely to vote in favour of this part of the proposal, given it appears to be advantageous for them.

However, due to the way the proposal is laid out investors would have to vote for against both elements of the proposal irrespective if they are supportive of both parts or not.

In recent years several countries have altered their listing rules to make it easier for DCSS to be adopted. In many cases this is an attempt to attract IPOs to a country’s stock exchange, particularly companies in the tech sector.

This includes the UK’s Financial Conduct Authority, which weakened the time-based sunset clause requirements for companies with a DCSS as part of its overhaul of listing rules last year.

Seven UK pension schemes led by Railpen wrote to the FCA voicing their concerns about the changes to rules around DCSS. Investors worth US4 trillion have also campaigned globally against DCSS via the Investor Coalition for Equal Votes (ICEV), which was co-founded by Railpen, the Council of Institutional Investors and several of the US’ largest pension funds in 2022.

The ICEV has previously urged for companies with DCSS to adopt either explicit time-based sunset clauses capped at seven years or provisions requiring the approval of a majority of both Class A and Class B shareholders to extend the share structure at least every seven years.

Some pushback against the lack of clarity currently surrounding DCSS appears to be building, however. Last week, the Enhancing Multi-Class Share Disclosures Act received bipartisan backing in the US House of Representatives, as reported by Minerva Analytics.

If adopted, the bill would offer shareholders deeper information on DCSS, require issuers of securities with such structures to disclose information about the shares of all classes of securities owned by and the voting power of particular shareholders to all investors in a company.

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Last Updated: 6 August 2025