| Dual class firms have been a topic of increased academic research in recent years. Traditionally the domain of family firms issuing publicly traded stock for the first time, the equity structure is becoming more prevalent through its adoption by high-profile technology firms such as Google, Facebook, and LinkedIn. The purpose of this dissertation, organized into two essays, is to analyze two aspects of a dual class firm's information disclosure not addressed in prior research: voluntary management earnings guidance and textual characteristics of mandatory annual report filings.;Management earnings forecasts are an extremely importance source of information for market participants. However, as insider voting rights increase relative to dividend rights, managers become more insulated from market pressures. Essay I predicts that this separation between voting and dividend rights (the "wedge") will result in a lower incidence of guidance, more range forecasts when guidance is provided, and less accurate forecasts. Essay II examines the effect of the wedge on the readability and tone of the management discussion and analysis (MD&A) section of the annual report. Insulation from market pressures resulting from a larger wedge may cause MD&A to be less readable and less optimistic. Alternatively, however, a larger wedge may result in more readable disclosures if management uses readability to self-bond and more optimistic disclosures if strong motivated reasoning effects are present.;While failing to discern an effect of the wedge on management forecast practices, this study finds that a larger wedge is associated with more readable and more optimistic filings. This study contributes to the literature by shedding light on the impact of insider ownership on the readability and tone of annual reports and may be useful in the comprehension and interpretation of annual reports by analysts, investors, and regulators. |
