The value of voting rights to majority shareholders: Evidence from dual-class stock unifications

Shmuel Hauser, Beni Lauterbach

Research output: Contribution to journalReview articlepeer-review

43 Scopus citations

Abstract

We study 84 dual-class stock unifications, where superior vote shareholders gave up their superior voting status (all firm stocks became "one share one vote") and received (in most cases) compensation in the form of additional shares. Unifications are essentially intrafirm transactions of voting rights, and afford observation of the intrafirm-assessed price of vote. The price of vote in unifications (1) increases with the percentage vote lost by the majority shareholders, (2) is higher in family-controlled firms, (3) decreases with institutional investor holdings, and (4) is similar to the "outside" price of vote implicit in the market prices of stocks.

Original languageEnglish
Pages (from-to)1168-1184
Number of pages17
JournalReview of Financial Studies
Volume17
Issue number4
DOIs
StatePublished - 1 Dec 2004

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