• We thank Gerald Gay and Jayant Kale (the editors), Craig Doidge (the referee), Utpal Bhattacharya, Craig Holden, Robert Jennings, Inmoo Lee, Robert Marquez, Darius Miller, Andrey Ukhov, Xiaoyun Yu, and seminar participants at Indiana University, Korea University, Seoul National University, University of Memphis, SEC Financial Reporting Conference, and FDIC Risk Transfer and Governance in the Financial System Conference for valuable comments. Joon Ho Hwang (the corresponding author) gratefully acknowledges financial support from the Korea University Business School.


We empirically decompose private benefits into benefits accruing from ownership and benefits accruing from control. We document that private benefits increase slowly with respect to the ownership level but increase rapidly with respect to the blockholder's likelihood of exercising control. The decomposition of private benefits allows us to quantify the magnitude of nonpecuniary private benefits by examining the block premium when the blockholder's likelihood of exercising control is close to zero. We find that the size of nonpecuniary private benefits ranges from 0.61% to 5.92% of the share price, or 18% to 29% of the total private benefits.