Abstract

http://ssrn.com/abstract=1921222
 
 

Citations (2)



 


 



Why are Shareholders Not Paid to Give Up Their Voting Privileges? Unique Evidence from Italy


Marco Bigelli


University of Bologna - Department of Management

Vikas Mehrotra


University of Alberta - Department of Finance and Statistical Analysis

P. Raghavendra Rau


University of Cambridge

August 31, 2011

Journal of Corporate Finance, 17(5), 1619-1635, 2011
ECGI - Finance Working Paper No. 180/2007

Abstract:     
Dual-class share unifications have typically been argued to be beneficial for voting shareholders. In the unification, voting shareholders are usually compensated for the loss of their superior voting privilege. However, no covenants exist that make this compensation mandatory for voting shareholders. In this paper, we examine a subset of dual class share unifications from Italy where, in the main, voting shareholders are not offered any compensation for the loss of their superior voting rights. We present a simple model describing the conditions under which the controlling voting shareholder will choose not to offer compensation to minority voting shareholders as part of a share unification. Our empirical results support the model predictions.

Number of Pages in PDF File: 45

Keywords: dual class shares, unification, corporate governance, expropriation, insider trading, equity structure

JEL Classification: G32, G34

Accepted Paper Series





Download This Paper

Date posted: September 3, 2011 ; Last revised: January 27, 2013

Suggested Citation

Bigelli, Marco and Mehrotra, Vikas and Rau, P. Raghavendra, Why are Shareholders Not Paid to Give Up Their Voting Privileges? Unique Evidence from Italy (August 31, 2011). Journal of Corporate Finance, 17(5), 1619-1635, 2011; ECGI - Finance Working Paper No. 180/2007. Available at SSRN: http://ssrn.com/abstract=1921222

Contact Information

Marco Bigelli
University of Bologna - Department of Management ( email )
Via Capo di Lucca 34
Bologna, 40126
Italy
+39 051 2098060 (Phone)
+39 051 6390612 (Fax)
Vikas Mehrotra
University of Alberta - Department of Finance and Statistical Analysis ( email )
School of Business
University of Alberta
Edmonton, Alberta T6G 2R6
Canada
780-492-2976 (Phone)
780-492-3325 (Fax)

P. Raghavendra Rau (Contact Author)
University of Cambridge ( email )
Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)
HOME PAGE: http://www.raghurau.com/
Feedback to SSRN


Paper statistics
Abstract Views: 2,109
Downloads: 723
Download Rank: 18,810
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.578 seconds