Hi all. Just wondering if any of you consider how important it is that company directors are in the top 20 shareholders on their registry. I have always thought they should be in order for a company to do well as the directors themselves are taking a hit personally too if the company does badly. If they are not in the 20 top is that a warning sign for you? Thanks!
Do you look at how many shares the company directors have?
- Thread starter hng049
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Depending on the company, being a major shareholder potentially requires serious wealth beyond that which even someone with a high income is likely to have with the exception of very few individuals.
So I don't see a need for them to be in the top 20 but if they're not holding any shares at all then that's a concern.
Even bigger concern if multiple senior persons have recently sold their holding in the company, that's a huge red flag.
So I don't see a need for them to be in the top 20 but if they're not holding any shares at all then that's a concern.
Even bigger concern if multiple senior persons have recently sold their holding in the company, that's a huge red flag.
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Agree;
The top 20 holders are too strict a measure.
Some of the bigger companies may have close to 20, if not more, directors.
On the other hand, directors of smaller ones may have simply floated part of their ailing business, or been given freebies to entice them to stay.
It's good if a director has some "skin in the game", but I pay more attention to the company's credentials and reputation than directors' holdings. When they start selling ahead of, or during, a general Market sell-down, that's when I beat a retreat myself; conversely, if they buy big with their own money, then I'm more inclined to join them or hold.
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