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Activist Investor Pressures Dropbox to End Founder-Controlled Structure

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Dropbox is facing significant pressure from activist investor Half Moon Capital to dismantle the company’s dual-class share structure, which grants CEO and co-founder Drew Houston a supermajority of voting power. The hedge fund has raised concerns about Dropbox’s slowing revenue growth and its strategy regarding payment tiers, according to a report by the Wall Street Journal.

Half Moon Capital, which holds around 40,000 shares in Dropbox, is advocating for the removal of the structure that currently gives Houston approximately 77% of the voting rights, thanks to his Class B shares, which carry ten times the voting power of Class A shares. The proposal to eliminate this structure is set for a vote at Dropbox’s annual meeting, with a majority vote required for approval, meaning Houston’s support would be crucial for its passage.

The activist investor has criticized the company for what it perceives as “significant missteps” and argues that the current voting arrangement prevents shareholders from holding management accountable. While Dropbox and Half Moon did not immediately respond to requests for comment, the outcome of the vote could significantly impact the company’s governance structure.

In recent months, Dropbox has faced challenges, including a 20% global workforce reduction announced in October 2024, following a 16% layoff in 2023. The situation has raised questions about the company’s strategic direction under Houston’s leadership.

Berkshire Shareholder Proposes AI Oversight Committee Amid Growing Concerns

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A shareholder of Berkshire Hathaway, the multinational conglomerate led by Warren Buffett, is urging the company to establish a committee of independent directors to oversee artificial intelligence (AI) risks. Tulipshare, an activist investment group based in London, submitted the proposal ahead of Berkshire’s annual meeting, scheduled for May 3. The resolution calls for the formation of a dedicated committee to monitor AI-related issues across the diverse businesses in Berkshire’s portfolio.

The proposal highlights the potential risks associated with AI, such as data breaches, privacy violations, business disruptions, and human rights concerns. Tulipshare argues that due to Berkshire’s vast influence across multiple industries, the company is in a unique position to lead in AI governance and ensure responsible use of the technology.

Berkshire’s spokesperson, Debbie Bosanek, confirmed that the proposal will be included in the company’s proxy statement. Warren Buffett has previously acknowledged AI’s significant potential, both for positive impact and harm. In a 2023 meeting, Buffett expressed unease about AI-generated content when an image and message surfaced that appeared to come from him, despite being fabricated.

However, Berkshire’s governance structure has traditionally been resistant to shareholder proposals calling for independent oversight. Buffett holds significant voting power—controlling over 30% of Berkshire’s voting shares—which makes it challenging for shareholder resolutions to succeed without his endorsement. Last year, a similar proposal to create an independent oversight committee for safety at Berkshire’s BNSF railroad received minimal support from shareholders.

Tulipshare argues that an AI oversight committee would align with Berkshire’s decentralized business model by providing unified oversight without disrupting the day-to-day operations of its subsidiaries. Given Buffett’s personal concerns about AI, particularly deepfake technology, the activist group suggests the proposal might gain traction.

Berkshire Hathaway owns a wide range of companies, including Geico, Brooks, See’s Candies, and Berkshire Hathaway Energy, in addition to its investments in major tech firms like Apple and Amazon. Despite Buffett’s long-standing leadership since 1965, the proposal signals growing shareholder interest in responsible AI governance within large corporations.

Costco Defends DEI Initiatives Amid Conservative Backlash

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Costco has taken a firm stance in support of its diversity, equity, and inclusion (DEI) efforts, pushing back against activist shareholders advocating for the dismantling of these policies. While companies like Walmart, John Deere, and Tractor Supply have shifted or scaled back their DEI initiatives, Costco remains committed, emphasizing the value DEI brings to its unique shopping experience.

The warehouse retailer’s board of directors unanimously recommended that shareholders reject a proposal from the National Center for Public Policy Research (NCPPR), a conservative think tank. The proposal called for Costco to issue a report on the financial risks of its DEI policies, alleging potential “illegal discrimination” against employees who are white, Asian, male, or straight.

Costco defended its DEI practices, stating they play a vital role in attracting and retaining diverse talent, enhancing merchandise originality, and fostering a shopping environment that reflects its members’ diversity. “A diverse group of employees helps bring originality and creativity to our merchandise offerings, promoting the ‘treasure hunt’ that our customers value,” the company explained in a proxy statement.

The retailer also highlighted its support for minority-focused organizations like the Thurgood Marshall College Fund and its supplier program, which collaborates with small and diverse businesses. Costco argued that NCPPR’s proposal disguised an anti-diversity agenda under the pretense of mitigating risk, stating, “The proponent’s broader agenda is not reducing risk for the company but abolition of diversity initiatives.”

Costco’s defense comes as DEI policies face mounting criticism from conservative groups, legal challenges, and political shifts. Some companies have adjusted their language—substituting terms like “DEI” with “inclusion” or “belonging”—to deflect pressure, while others have downplayed their DEI efforts compared to the heightened focus in 2020 and 2021.

Despite this environment, Costco has positioned itself as a progressive employer, known for paying some of the highest wages in retail. The company’s commitment to DEI, it says, reflects its belief in fair and legal practices that benefit its employees, customers, and shareholders alike.