Dual Class Shares

Working Paper

01 March 2013

Ownership, Investment and Governance: The Costs and Benefits of Dual Class Shares

In this paper we show that dual-class shares can be an answer to agency conflicts rather than a result of agency conflicts. When a firm issues voting shares to raise funds, an incumbent manager?s control rights are diluted. This increases...

Suman Banerjee | Ronald Masulis
16 April 2018

Loyalty Shares with Tenure Voting - Does the Default Rule Matter? Evidence from the Loi Florange Experiment

The contractual theory of the firm predicts that companies adopt charters that maximise firm value, regardless of the default rule. We test this proposition around an exogenous switch of the default from one share-one vote to tenure...

Marco Becht | Yuliya Kamisarenka | Anete Pajuste