In corporate governance and corporate operations, the proportion of shares held by directors and supervisors (Directors’ Holdings) is considered an important indicator that not only reflects the confidence of the company’s management in the future development of the company but may also affect investors’ expectations of the company’s future performance. In Taiwan, the level of Directors’ Holdings has long been a focus of market participants’ attention because it involves the adjustment of interests within the company, the distribution of control, and the trust of external investors. However, effectively interpreting and utilizing such information may be a significant challenge for the average investor.
TEJ Taiwan Economic News will introduce Directors’ Holdings in detail, explain their impact on a company, and how to find relevant shareholding information through various channels. This will help readers better understand the meaning of Directors’ Holdings and use it as an important basis for corporate analyses.
Table of Contents
Directors’ Holdings is the ratio of Directors’ Holdings to the company’s share capital, and the level of the ratio reflects one of the indicators of the confidence of the company’s senior management in the company’s prospects. According to Article 2 of the ‘Implementation Rules for the Constituent and Verification of Directors’ and Supervisors’ Shareholdings in Public Companies’, a company has a certain percentage of Directors’ Holdings according to the size of its capital to align the interests of Directors and Supervisors of a company with those of the company using legal restrictions, and to avoid the making of decisions that would jeopardize the long-term development of the company, which would result in proxy problems.
| Paid-up Capital | Proportion of Directors’ Holdings | |
| Directors and Supervisors | Supervisor | |
| Less than 300 million | At least 15% | At least 1.5% |
| Over 300 million to 1 billion | At least 10% | At least 1% |
| Over 1 billion to 2 billion | At least 7.5% | At least 0.75% |
| Over $2 billion to $4 billion | At least 5% | At least 0.5% |
| Over $4 billion to $10 billion | At least 4% | At least 0.4% |
| Over $10 billion to $50 billion | At least 3% | At least 0.3% |
| Over $50 billion – $100 billion | At least 2% | At least 0.2% |
| Over $100 billion | At least 1% | At least 0.1% |
The above table shows that the smaller a company’s capitalization, the relatively higher the Directors’ Holdings requirement; conversely, the larger a company’s capitalization, the relatively lower the Directors’ Holdings requirement.
What messages do the shareholding ratios of directors and supervisors reveal? The following is an in-depth discussion of the implications.
When a company’s directors and supervisors hold a higher percentage of shares, it is often seen as a sign that the management is actively involved in the company’s operations, as their financial interests are tied to the company’s performance. Not only that, but it also strengthens the trust of outside investors in the future of the company, which helps to stabilize the management team within the company. When external investors see that the management is ‘standing by the company’, they tend to be more optimistic about the long-term development of the company, and this trust is likely to lead to positive reactions in the market, further driving up the share price.
In addition, a high proportion of Directors’ Holdings may imply that management has a stronger voice in corporate governance and can effectively promote the implementation of the company’s strategy. For an enterprise with a clear development direction, this can enhance the company’s competitiveness in the market.
When the proportion of Directors’ Holdings is low, or there is a significant decline, the market’s interpretation may go in the opposite direction. The market may interpret a reduction in management’s shareholding as a lack of confidence in the company’s future development. It may even lead to speculation of unfavorable changes within the company. This potential for speculation underscores the need for clear and transparent communication with external investors.
Such a change in market sentiment will often hurt a company’s share price. In particular, if there is a significant reduction in the number of directors and supervisors, there may be panic selling in the market, resulting in a rapid fall in share price. In addition, a low proportion of Directors’ Holdings may imply that the management needs a stronger voice in corporate governance and is susceptible to external interference, which is a potential risk to the long-term stability of the company’s operations.
Everyone likely already knows that changes in the shareholding of directors and supervisors are not just numbers—they reflect essential signals about a company’s internal dynamics. So, how can you find out the shareholding ratio of directors and supervisors? Here are three methods to quickly check their shareholding ratio for your convenience!
Investors can find information about Directors’ Holdings in the Market Observation Post System (MOP). This industry categorization system allows you to view information on Directors’ and Supervisors’ holdings within each company.
Detailed operation steps:
Click on ‘Basic Information’ in Market Observation Post System, select ‘Directors, Supervisors and Major Shareholders’ Shareholdings, Pledges and Transfers, ‘then click on “Summary of Directors, Supervisors, Managers, and Major Shareholders” Shareholdings,’ and then click on ‘Market Segment’ and ‘Industry Classification’ to find out the company you want to see.
If you feel that the website’s unintuitive design makes you feel disturbed when you are searching for the details of Directors‘ Holdings, we would like to recommend a more convenient channel for you to search for the details—TEJ PRO! Simply log in to TEJ PRO and click on “Listed (OTC) Directors” Holdings” in the TEJ Company DB, and you will be able to get all the relevant information easily.
In addition, the TEJ API can also be used to capture Directors‘ Holdings information. The following code captures the “Directors” and Supervisors’ Holdings‘, which is a detailed description of this database, including monthly announcements of Directors’ and Supervisors‘ holdings of listed and over-the-counter (OTC) companies, and the companies’ returns, public statements and annual reports submitted to the Taiwan Stock Exchange and OTC Markets.
Here is an example of TSMC (2330).
import tejapi
# tej_key
tejapi.ApiConfig.api_base='your base'
tejapi.ApiConfig.api_key='your key'
data = tejapi.get('TWN/ABSTN1', coid = '2330', mdate = {'gte':'2021-01-01', 'lte':'2024-07-31'}, chinese_column_name = True, paginate=True)
dataPartial output results:
The proportion of Directors’ Holdings and its changes are not only core data in corporate governance but also an essential indicator of the confidence of a company’s senior management in its corporate prospects and a reflection of the market’s expectations of the company’s future development. Whether it is the stability and trust brought by a high percentage of shareholding or the uncertainty and risk that a low shareholding may cause, it profoundly impacts the company’s operation and market performance.
TEJ, with its various query tools and APIs, is a reliable source for investors to obtain detailed information on Directors’ Holdings. This high-quality data enables investors to more accurately grasp the company’s internal dynamics and future development potential, thereby making more informed investment decisions. Furthermore, investors can use these data to optimize their investment strategies and gain an edge in the complex and volatile market.
TEJ not only helps you to collate all kinds of high-quality information on the history or the current day’s trading of zero shares but also provides backtests of various strategies to help you optimize your investment strategy, so you don’t have to spend time searching for comparative information everywhere and miss out on the perfect opportunity to invest. TEJ is your best choice for mastering financial data!
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