IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Insider Ownership and Pension Funding: An Empirical Analysis

Listed author(s):
  • Cassandra R. Cole
  • David W. Sommer
Registered author(s):

    Few studies of pension funding consider the agency conflicts that might affect pension plan management and the role of pension plans within the overall capital structure of firms. The primary purpose of this study is to determine if a relation exists between the level of insider ownership and pension plan funding levels. The results of the study suggest that pension plan funding levels are affected by the levels of managerial stock ownership, but that the relation is non-linear. At the lowest levels of insider ownership, a significant and negative relation exists. However, at moderate levels of insider ownership, a positive relation is observed. Finally, no relation is observed at insider ownership levels above 10 percent. This may be a result of the competing effects offsetting one another. These results are consistent with both the alignment of interest hypothesis and the managerial entrenchment hypothesis regarding the impact of insider ownership and provide evidence that managers do make pension funding decisions based on overall corporate financial policies.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Western Risk and Insurance Association in its journal Journal of Insurance Issues.

    Volume (Year): 33 (2010)
    Issue (Month): 2 ()
    Pages: 111-131

    in new window

    Handle: RePEc:wri:journl:v:33:y:2010:i:12:p:111-131
    Contact details of provider:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wri:journl:v:33:y:2010:i:12:p:111-131. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Barrese)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.