The voting premium

Doron Levit, Nadya Malenko and Ernst Maug

No 15718, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper develops a unified theory of blockholder governance and the voting premium, in a setting without takeovers and controlling shareholders. A voting premium emerges when a minority blockholder tries to influence the composition of the shareholder base by accumulating votes and buying shares from dissenting shareholders. Empirical measures of the voting premium do not reflect the value of voting rights or voting power. A negative voting premium results from free-riding by dispersed shareholders on the blockholder's trades. Conflicts between dispersed shareholders and the blockholder endogenously increase the liquidity of voting shares, but do not necessarily increase the voting premium.

Keywords: Voting; Trading; Voting premium; Blockholders; Ownership structure; Shareholder rights; Corporate governance (search for similar items in EconPapers)
JEL-codes: D74 D82 D83 G34 K22 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-pol
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The Voting Premium (2026)
Working Paper: The Voting Premium (2023)
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