Strong Criticism for Hyatt Hotels’ Proposed Corporate Governance Structure

It is not often that you see the phrase “the worst in our entire coverage universe” to describe the proposed corporate governance structure of a company about to enter an initial public offering.

However, Green Street Advisors have said just that about the proposed corporate governance structure of Hyatt Hotels Corp. In addition, hotel union Unite Here has criticized corporate governance structure by claiming that there is not enough independence of the board of directors.

The report regarding questions about Hyatt’s corporate governance structure is from the Chicago Tribune by Julie Wernau:

“The existing owners are sending a strong signal to outside public shareholders that the Pritzker family will firmly control Hyatt, even if the family’s economic ownership interest falls below 50 percent,” wrote John Arabia, senior lodging analyst at Green Street.

Arabia found the use of supervoting common shares “objectionable” and said the dual-class structure had a “foul odor.”

Tags: board of directors, corporate governance, Hyatt Hotels, initial public offering, ipo