What is Insider %?
Insider Ownership % shows what percentage of the company is owned by executives, directors, and board members. High insider ownership often indicates management confidence and alignment with shareholders.
Think of it like this
If the CEO owns 20% of the company, they have real 'skin in the game' - their wealth rises/falls with yours. It's like a restaurant where the chef owns part of the business vs. just collects a salary. More invested = more care!
Formula
Insider Ownership % = (Shares Held by Insiders / Total Shares Outstanding) × 100%- Insider Shares: Shares held by executives, directors, board
- Total Shares: All shares outstanding
Why it matters
- Shows management confidence in the business
- Aligns management incentives with shareholders
- High ownership often bullish signal (skin in game)
- Watch for trends - buying vs selling
What's a good value?
< 5%
Very Low
Little insider stake, mercenary management
5-15%
Low
Modest insider ownership
15-30%
Good
Healthy alignment of interests
> 30%
High
Strong insider control and commitment
Real-world example
Berkshire Hathaway: Warren Buffett owns ~16% = massive alignment. Amazon: Jeff Bezos owned ~10% when CEO = skin in game. Many small-cap CEOs own 20-40%. Large-cap CEOs often own <1% (but big $ amount).
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