We document that ownership by officers and directors of publicly traded
firms is on average higher today than earlier in the century.
Managerial ownership has risen from 13 percent for the universe of
exchange-listed corporations in 1935, the earliest year for which such
data exist, to 21 percent in 1995. We examine in detail the robustness
of the increase and explore hypotheses to explain it. Higher managerial
ownership has not substituted for...
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We document that ownership by officers and directors of publicly traded
firms is on average higher today than earlier in the century.
Managerial ownership has risen from 13 percent for the universe of
exchange-listed corporations in 1935, the earliest year for which such
data exist, to 21 percent in 1995. We examine in detail the robustness
of the increase and explore hypotheses to explain it. Higher managerial
ownership has not substituted for alternative corporate governance
mechanisms. Lower volatility and greater hedging opportunities
associated with the development of financial markets appear to be
important factors explaining the increase in managerial ownership.
[ABSTRACT FROM AUTHOR]
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