Why are shareholders not paid to give up their voting privileges? Unique evidence from Italy

► Prior literature has argued that unifying dual class shares is beneficial for voting shareholders. ► In Italy, exogenous changes in regulation made non-voting shares less useful to controlling shareholders, so the controlling voting shareholders unified their share classes. ► This is the forced conversion decision by the controlling shareholder and is mostly driven by macro-economic factors. ► During unification, a significant proportion of firms chose not to compensate voting shareholders for the loss of voting privileges. ► During this process, the minority voting shareholders suffered a wealth transfer to holders of non-voting shares. ► The compensation decision is driven mostly by ownership factors, specifically the ownership of non-voting shares by the controlling shareholder.