Journal of Management & Governance

, Volume 18, Issue 2, pp 373–417 | Cite as

Voluntary disclosure and ownership structure: an analysis of dual class firms



This study focuses on the association of voluntary compensation disclosure and ownership structure. It provides evidence that the detachment of control and cash flow rights in dual class share firms is associated with lower levels of compensation disclosure. This association is incremental to the level of managerial ownership and family ownership. The study attributes these disclosure results to the concealment of excess compensation in dual class share firms. Consistent with this explanation, the study finds that managers in dual class share firms earn higher compensation relative to their single class counterparts. An analysis within dual class firms also reveals that compensation disclosure is decreasing in managers’ voting control but increasing in their cash flow rights consistent with a private control benefits explanation. To examine these research questions, the study develops a contextual measure of compensation disclosure that attempts to capture firms’ economic bases for award of compensation.


Dual class firms Voluntary disclosure Ownership structure Private benefits Executive compensation Control rights Cash flow rights 



This study is partially based on my dissertation at the University of Toronto. I would like to thank my thesis chair, Gordon Richardson and other members of my thesis committee, Jeffery Callen and Craig Doidge for their invaluable support and guidance. This paper has also benefited from the comments of Alexander Dyck, Bipin Ajinkya, Jan-Mahrt Smith,Jenny Tucker, Joseph Fan and workshop participants at the University of Alberta, University of Arizona, Brock University, University of Florida, Florida State University, University of Manitoba, Nanyang Technological University, National University of Singapore, Pace University, the University of Toronto and the 2007 AAA Annual Meeting Concurrent Session. The author would also like to thank the Editor and three anonymous reviewers for their professional work and constructive comments and suggestions.


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Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.University of Massachusetts-Boston (UMass-Boston)BostonUSA

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