LONDON, Sept 1 FTSE 100 companies led by board
members who have large holdings in their companies' shares have
underperformed both Britain's blue-chip index and
businesses with the smallest management shareholdings, a new
Investors are often drawn to companies at which he
management own a large portion of the shares, believing that
this helps to align the interests of directors with those of the
shareholders and provides an added incentive to deliver growth.
But the study published on Monday by trading platform
provider Banc De Binary calls into question that belief.
In the past year, share prices of the 10 companies at which
the boards have the largest holdings of their own shares rose on
average 1 percent, while the index climbed 6 percent.
Shares in the 10 companies with the smallest board
shareholdings climbed by 20 percent on average.
The findings represent a reversal of a five-year trend, in
which boards with large shareholdings in their own companies
"(The study) reinforces that it is possible for directors to
deliver substantial growth without having to grant them huge
numbers of shares and diluting existing shareholdings," Banc De
Binary founder Oren Laurent said.
(Reporting by Clare Hutchison; Editing by David Goodman)