Publications
Publications
- February 2009 (Revised June 2010)
- HBS Case Collection
Note on Measuring Controlling Shareholder's Ownership, Voting, and Control Rights
Abstract
Founders and their families can raise equity without relinquishing control of their companies through the use of mechanisms such as dual-class stock, pyramidal ownership, voting agreements, and disproportionate board representation. The use of these mechanisms in publicly traded companies is widespread throughout the world and in the United States. Understanding how the various mechanisms contribute to the separation between economic ownership and control is important for the individuals who set them up because the choice among these mechanisms impacts firm value. It is also important for minority shareholders in these companies and for regulators, for reasons of transparency and investor protection.
Keywords
Equity; Corporate Governance; Governing and Advisory Boards; Measurement and Metrics; Ownership Stake; Business and Shareholder Relations; Valuation
Citation
Villalonga, Belen. "Note on Measuring Controlling Shareholder's Ownership, Voting, and Control Rights." Harvard Business School Background Note 209-109, February 2009. (Revised June 2010.)