The Value of Control
BRG is home to renowned thought leaders and experts considered authorities in their fields of work. Our timely research and perspectives provide analysis and insights on the most important issues facing the industries and organizations we serve.
Control Premiums, Minority Interest Discounts, and the Fair Market Value Standard
Kevin Kreitzman contributed to the first edition of BRG Review.
Control premiums applied in non-negotiated transactions of private securities represent the value that can be extracted from minority interests by controlling shareholders. The common practice of using observed acquisition premiums to justify excessive control premiums (or minority interest discounts) is misguided and not supported by the empirical evidence. This practice causes significant damage to the welfare of the general public and the millions of employees who rely on the integrity of these valuations. Small control premiums do persist despite laws to protect minority shareholders, even though such premiums should be eliminated if directors comply with their fiduciary responsibilities.
Related Professionals
Prepare for what's next.
ThinkSet magazine, a BRG publication, provides nuanced, multifaceted thinking and expert guidance that help today’s business leaders adopt a more strategic, long-term mindset to prepare for what’s next.