A reader formed in a data transducer includes a first shield, a read gap, a second shield, a maanetic compensation layer, and a non-magnetic spacer layer. The first shield is formed of a multilayer comprised of a layer of a first material. The second shield is spaced apart from the first shield by the read gap. The magnetic compensation layer is formed in the first shield and has a coefficient of thermal expansion of less than the coefficient of thermal expansion of the first material. The non-magnetic spacer layer separates the first material layer and the compensation layer of the first shield.