Were the Good Old Days That Good? Changes in Managerial Stock Ownership Since the Great Depression

Clifford G. Holderness, Randall S. Kroszner and Dennis P. Sheehan

No 6550, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document that ownership by officers and directors of publicly-traded firms is on average higher today than earlier in the century. Managerial ownership rises 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.

JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 1998-05
Note: DAE CF
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Citations: View citations in EconPapers (3)

Published as Journal of Finance (April 1999): 435-469.

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