Multiple-Vote Shares in Europe and in Spain: Liberalisation with Distrust

The European Union has recently adopted a package of legislative measures aimed at making public capital markets more attractive, particularly for medium‑sized companies. Among them, Directive (EU) 2024/2810 is of particular interest, as it requires Member States to allow companies seeking admission to trading on a multilateral trading facility to issue multiple‑vote shares. The underlying objective is familiar: enabling controlling shareholders—typically families—to access public markets without relinquishing control.

In principle, this represents a welcome liberalisation, aligned with existing mechanisms such as loyalty or double‑vote shares. In practice, however, the Directive reflects a characteristic European ambivalence: every step towards flexibility is accompanied by a dense network of safeguards. Member States are encouraged, and in effect monitored, to adopt ‘adequate protection’ for shareholders without enhanced voting rights, including sunset clauses and voting limitations. They must also notify the Commission of any such safeguards, reinforcing a framework of centralised oversight.

The level of regulatory detail is striking. Article 4 of the Directive lays down complex, cumulative requirements on qualified majorities, class voting, and limits on voting ratios. The implicit assumption is clear: capital markets cannot be trusted to price multiple‑vote shares correctly. European policymakers appear convinced that, absent regulatory intervention, minority shareholders would be systematically disadvantaged.

This assumption is questionable. If a family retains control through multiple‑vote shares, the market will simply discount the price of the ordinary shares to reflect the risk of private benefits of control. There is no reason to believe that investors, particularly institutional ones, cannot understand and price such governance structures. Nor is it clear why regulatory diversity among Member States should be regarded as an obstacle rather than a source of beneficial competition in corporate law.

The Spanish transposition illustrates how these European anxieties can be amplified at the national level. The draft bill implementing the Directive goes well beyond what EU law requires. By treating multiple‑vote shares as loyalty shares, it introduces a rigid framework into the Spanish Companies Act: caps on the proportion of capital carrying multiple votes, a maximum voting ratio, a ten‑year time‑based sunset clause, and—most problematically—the extinction of multiple voting rights upon transfer.

This last feature effectively neutralises the instrument. If multiple‑vote shares lose their defining characteristic when transferred, they cease to be a meaningful mechanism for preserving control. Combined with the percentage cap and the time limit, the Spanish approach transforms multiple‑vote shares into a marginal and unattractive variant of loyalty shares.

This is particularly puzzling given the profile of companies for which multiple‑vote shares are most valuable in Europe. Unlike the United States, where the instrument is mainly used by founder‑led technology firms, the natural European candidates are established family companies in their second or third generation. For these firms, going public provides liquidity to some family members while allowing a stable controlling core to remain in place. The market is fully capable of pricing this trade‑off, especially when multiple‑vote shares are issued at the IPO stage rather than created through later conversions.

The Spanish rules further reduce the appeal of the instrument by imposing mandatory takeover obligations on acquirers of control through multiple‑vote shares, while at the same time depriving those shares of any transferable control premium. The result is a regime that undermines both the economic logic of multiple‑vote shares and the internal coherence of the legal notion of share classes.

Ultimately, the regulation of multiple‑vote shares in Europe reveals a deeper mistrust: mistrust of Member States, mistrust of markets, and, ultimately, mistrust of private ordering. What was presented as a liberalising reform risks becoming yet another example of over-engineering, where complexity defeats purpose and flexibility is granted only to be immediately withdrawn.

Jesús Alfaro Águila-Real is a Professor of Commercial Law at Universidad Autónoma de Madrid.