Using data of Taiwan stock market, this article investigates the influences of controlling shareholders’ agency problem on corporate performance by using ultimate controlling shareholders approach. The hypothesis that debt would reduce agency costs is also examined. The empirical results show that controlling shareholders do not expropriate corporate values. Evidences do not support the proposition that some controlling shareholders would influence corporate performance by utilizing pyramid ownership structures and cross-holding to separate voting and cash flow rights. However, the corporate value would decrease if controlling shareholders involved in management. Our results also reveal that debt mitigate the loss from those misaligned incentives.