Review of Finance Vol. 29 No. 3 2025
Is one share/one vote optimal?
Abstract
In a tender offer by a value-increasing raider, voting shareholders face a free-rider problem. However, when they are not atomistic, they do not completely free-ride. In contrast, non-voting shareholders, who are never pivotal for the success of the offer, are absolute free-riders. Hence, in this case there is a gain from departing from one share/one vote. This departure also has a cost; there is an increased vulnerability to value-decreasing raiders, and the optimal governance structure balances the cost and the gain.
- DOI
- 10.1093/rof/rfaf011
- Volume
- 29
- Issue
- 3
- Pages
- 635-660
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref