Document Type


Date of Degree

Spring 2014

Degree Name

PhD (Doctor of Philosophy)

Degree In

Business Administration

First Advisor

Daniel W. Collins

Second Advisor

Steven P. Hribar


Mandatory stock ownership plans require executives to hold a minimum level of stock. I exploit these changes in managerial stock ownership to examine the relation between managerial ownership and manager-shareholder incentive alignment. In contrast to prior work that suggests equity incentives induce opportunistic managerial behavior, I find earnings management declines following the adoption of mandatory stock ownership plans relative to a propensity-matched control sample. I also posit and find a reduction in bid-ask spreads following plan adoptions, consistent with manager-shareholder incentive alignment improving market liquidity and decreasing information asymmetry. These findings are consistent with boards of directors contracting with managers to reduce the agency costs of equity.


v, 49 pages


Includes bibliographical references (pages 45-49).


Copyright 2014 Phillip James Quinn