Agency Problems at Dual-Class Companies

• 成果类型: Article
• 署名作者: Masulis, Ronald W.; Wang, Cong; Xie, Fei
• 署名单位: Vanderbilt University; Chinese University of Hong Kong; George Mason University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2009.01477.x
• 发表日期: 2009
• 页码: 1697-1727
• 关键词: CORPORATE GOVERNANCE; Firm value; EQUITY OWNERSHIP; voting-rights; MARKET; COSTS; cash; COMPENSATION; Dividends

摘要

Using a sample of U.S. dual-class companies, we examine how divergence between insider voting and cash flow rights affects managerial extraction of private benefits of control. We find that as this divergence widens, corporate cash holdings are worth less to outside shareholders, CEOs receive higher compensation, managers make shareholder value-destroying acquisitions more often, and capital expenditures contribute less to shareholder value. These findings support the agency hypothesis that managers with greater excess control rights over cash flow rights are more prone to pursue private benefits at shareholders' expense, and help explain why firm value is decreasing in insider excess control rights.