Who can explain to me how a company pays for putting aside money for possible class action litigation?
If it is share related what effect does it have on the overall number of shares?
Why does a company needs to do so (is it government mandated or is it just to cover their butt)? Visa called it retrospective responsibility plan.
How is this amount determined?
This is what I found and I can’t understand it.
Conversion feature. Under the terms of the plan, when the Company funds the escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock. This has the same effect on earnings per share as repurchasing the Company’s class A common stock, by reducing the as-converted class B common stock share count.
I have been a share holder of visa for a long time.
Information link that is making my head hurt.
https://www.sec.gov/Archives/edgar/data/1403161/000119312511315956/R12.htm
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