The Company maintains a dual class structure for its common stock. Class B common stock has ten votes per share while Class A common stock has one vote per share.

Voting results are currently disclosed by the Company without any distinction by share class. It is important for those results to be disclosed separately by share class to determine whether the concerns of each class of shareholders are aligned.

Due to the Company’s dual class share structure, a small minority of shareholders control a disproportionate amount of the voting rights. As the Company notes, “We have a stockholder who can exercise significant influence over matters that are brought to a vote of our stockholders.”1 The Class B holdings of Mr. Stuart Miller, the Executive Chairman and Co-Chief Executive Officer, give him approximately 39% of the voting power while holding only roughly 8% of the economic interest.2

Given that Class B shareholders can inordinately impact voting decisions, there is potential for outcomes that diverge from the interests of the wider shareholders. Consequently, it would benefit the majority of the Company’s shareholders to clearly see when a skewed result has occurred.

Recent voting patterns suggest that Class A and Class B shareholders may not always share the same priorities on key governance and disclosure matters. Recent proposals relating to eliminating the dual class stock structure,3 disclosing political spending,4 emissions reduction plans5 and establishing an independent board chair6 are all estimated to have received majority support among Class A shareholders, based on our calculations. Nonetheless, none were approved – an outcome that could be attributable to the Company’s dual class structure.

The disaggregation of voting results by share class would enable Class A shareholders to better monitor how responsive the Company is to issues that a majority of independent shareholders support and would promote a more transparent understanding between the two classes.

The Council of Institutional Investors recommends that companies with multiple share classes with unequal voting rights “supplement their final results with tallies for each class,”7 emphasizing that class-by-class disclosure is important for transparency and “may prompt value-enhancing conversations among board members and managers.”8


1
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920760/000162828025002404/len-20241130.htm

2
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920760/000119312525040938/d900040ddef14a.htm

3
https://www.sec.gov/Archives/edgar/data/920760/000119312523055066/d378085ddef14a.htm

4
https://www.sec.gov/Archives/edgar/data/920760/000119312524051712/d511799ddef14a.htm#toc511799_29

5
https://www.sec.gov/Archives/edgar/data/920760/000119312524051712/d511799ddef14a.htm#toc511799_29

6
www.sec.gov/ix?doc=/Archives/edgar/data/0000920760/000119312525040938/d900040ddef14a.htm#toc900040_28

7
https://www.cii.org/corp_gov_policies

8
https://www.cii.org/content.asp?contentid=312