New Study Says Multiclass Voting Companies Underperform, Riskier

IRRC Institute and ISS - October 2, 2012

A new study finds that controlled companies - particularly those with multiple classes of shares - generally underperform over the long term. As compared to companies with dispersed ownership, controlled companies experience more stock price volatility, increased material weakness in accounting controls, more related party transactions, and offer fewer rights to unaffiliated shareholders. The study results challenge the notion that multiclass voting structures benefit a company and its shareowners over the long term.

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