We believe that current public markets don't always serve the needs of today's modern companies. Despite a growing economy, and a growing number of total companies, U.S. public listings have fallen by roughly 50 percent between 1996 and 2016 (Credit Suisse). There are multiple reasons companies are choosing to stay private - such as access to an abundance of private capital and the rising cost of being a public company - but LTSE Listings believes one of the most significant is the overwhelming pressure many public companies feel to manage to the quarter, potentially at the expense of long-term growth.
We believe that it's a detriment to our economy when companies can't focus on the long-term. The McKinsey Global Institute found that companies that operate with a long-term mindset have in the aggregate outperformed their industry peers across almost every financial measure that matters since 2001. Additionally, companies that managed for the long term added nearly 12,000 more jobs on average than their peers from 2001 to 2015.
LTSE aims to reinvent the public company experience through innovative listing standards that are focused on novel approaches to disclosure practices, shareholder voting, executive compensation, and board and stakeholder policies.
LTSE's baseline listing are similar to those of IEX, NYSE and Nasdaq. We built in a set of innovative additions to those standards designed to empower and reward long-term focused companies and the investors who support them.
LTSE listing standards are designed to promote the following goals:
LTSE provides a new, innovative listings option for companies across industries and geographies and is designed for companies concerned with short-termism in the public markets. Any company that complies with the LTSE listing standards is eligible to list. The LTSE standards are designed to attract successful, visionary enterprises with strong values and a commitment to long-term success.
LTSE believes that long-term shareholders should have a greater role in a company's corporate governance than short-term shareholders. Companies listed on LTSE will provide all shareholders with the ability, at the shareholders' option, to accrue additional voting power over time up to 10x over 10 years, accruing on a monthly basis.
LTSE strives to shift investors' focus from evaluating companies' progress from quarterly results to long-term growth strategy and progress, and to give investors additional relevant information for evaluating long-term success. In addition to standard disclosures already required by the SEC and other exchanges, new company disclosures will include:
Yes, companies listed on LTSE are still required to comply with all GAAP requirements.
Yes, companies have the option to list only on LTSE, or to dual list on LTSE and another U.S. exchange.
Yes. LTSE-listed companies will be subject to enhanced disclosures regarding buybacks. We want to enable investors to have greater transparency around a company's buyback initiatives and earnings per share (EPS) net of buybacks.