Ownership and Control Structure of Brazilian Companies

35 Pages Posted: 14 Apr 2000

See all articles by Silvia Mourthe Valadares

Silvia Mourthe Valadares

Ministry of Planning, Budget e Management

Ricardo P. C. Leal

The COPPEAD Graduate School of Business

Date Written: Undated

Abstract

The paper analyzes the structure of ownership and control of public Brazilian companies using data from 325 companies listed at the Sao Paulo Stock Exchange. We show a high degree of ownership concentration. The biggest shareholder has, on average, 41% of the equity capital, while the five biggest have 61%. The concentration occurs mainly with voting shares with 62% of the companies having one shareholder with more than 50% of the voting shares. Actually, the violation of the one share-one vote rule with the use of non-voting shares is very common. Only 11% of the companies does not have non voting shares and the companies have, on average, only 54% of their equity capital as voting capital. We also analyze the indirect ownership structure. Pyramiding structure is not commonly used as a way of violating the one share - one vote rule, besides the fact that the control is maintained through more than one tier. We also show the importance of different shareholder classes. Corporations are the main investor category in the direct ownership structure while individuals are more important at the when indirect control is accounted for.

JEL Classification: G32, G34

Suggested Citation

Valadares, Silvia Mourthe and Leal, Ricardo Pereira Câmara, Ownership and Control Structure of Brazilian Companies (Undated). Available at SSRN: https://ssrn.com/abstract=213409 or http://dx.doi.org/10.2139/ssrn.213409

Silvia Mourthe Valadares

Ministry of Planning, Budget e Management ( email )

Esplanada dos Ministerios, Bloco K - Sala 625
Brasilia, DF 70040-906
Brazil
+55 61 429-4706 (Phone)
+55 61 321-7745 (Fax)

Ricardo Pereira Câmara Leal (Contact Author)

The COPPEAD Graduate School of Business ( email )

Rua Pascoal Lemme
355 - Cidade Universitária
Rio de Janeiro, Rio de Janeiro 21941-918
Brazil
39389871 (Phone)

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