{"id":1271,"date":"2024-09-26T18:00:00","date_gmt":"2024-09-26T18:00:00","guid":{"rendered":"https:\/\/www.tejwin.com\/en\/insights\/what-is-the-directors-holdings\/"},"modified":"2024-09-26T18:00:00","modified_gmt":"2024-09-26T18:00:00","slug":"what-is-the-directors-holdings","status":"publish","type":"insight","link":"https:\/\/www.tejwin.com\/en\/insights\/what-is-the-directors-holdings\/","title":{"rendered":"What is the Directors’ Holdings ? TEJ will help you get to know each other from scratch"},"content":{"rendered":"
\"TEJ
Photo by studio 63<\/a> on shutterstock<\/a><\/figcaption><\/figure>\n

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In corporate governance and corporate operations, the proportion of shares held by directors and supervisors (Directors\u2019 Holdings) is considered an important indicator that not only reflects the confidence of the company\u2019s management in the future development of the company but may also affect investors\u2019 expectations of the company\u2019s future performance. In Taiwan, the level of Directors\u2019 Holdings has long been a focus of market participants\u2019 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.<\/p>\n

TEJ Taiwan Economic News will introduce Directors\u2019 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\u2019 Holdings and use it as an important basis for corporate analyses.<\/p>\n

What are the Directors\u2019 Holdings ?<\/h2>\n

Directors\u2019 Holdings is the ratio of Directors\u2019 Holdings to the company\u2019s share capital, and the level of the ratio reflects one of the indicators of the confidence of the company\u2019s senior management in the company\u2019s prospects. According to Article 2<\/a> of the \u2018Implementation Rules for the Constituent and Verification of Directors\u2019 and Supervisors\u2019 Shareholdings in Public Companies\u2019, a company has a certain percentage of Directors\u2019 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.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
Paid-up Capital<\/td>\nProportion of Directors\u2019 Holdings<\/td>\n<\/tr>\n
Directors and Supervisors<\/td>\nSupervisor<\/td>\n<\/tr>\n
Less than 300 million<\/td>\nAt least 15%<\/td>\nAt least 1.5%<\/td>\n<\/tr>\n
Over 300 million to 1 billion<\/td>\nAt least 10%<\/td>\nAt least 1%<\/td>\n<\/tr>\n
Over 1 billion to 2 billion<\/td>\nAt least 7.5%<\/td>\nAt least 0.75%<\/td>\n<\/tr>\n
Over $2 billion to $4 billion<\/td>\nAt least 5%<\/td>\nAt least 0.5%<\/td>\n<\/tr>\n
Over $4 billion to $10 billion<\/td>\nAt least 4%<\/td>\nAt least 0.4%<\/td>\n<\/tr>\n
Over $10 billion to $50 billion<\/td>\nAt least 3%<\/td>\nAt least 0.3%<\/td>\n<\/tr>\n
Over $50 billion \u2013 $100 billion<\/td>\nAt least 2%<\/td>\nAt least 0.2%<\/td>\n<\/tr>\n
Over $100 billion<\/td>\nAt least 1%<\/td>\nAt least 0.1%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>
Unit: NTD<\/figcaption><\/figure>\n

The above table shows that the smaller a company\u2019s capitalization, the relatively higher the Directors\u2019 Holdings requirement; conversely, the larger a company\u2019s capitalization, the relatively lower the Directors\u2019 Holdings requirement.<\/p>\n

Is it good to have high Directors\u2018 Holdings? Take one minute to understand the meaning of high and low Directors\u2019 Holdings.<\/h2>\n

What messages do the shareholding ratios of directors and supervisors reveal? The following is an in-depth discussion of the implications.<\/p>\n

High Proportion of Directors\u2019 Holding<\/h3>\n

When a company\u2019s 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\u2019s operations, as their financial interests are tied to the company\u2019s 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 \u2018standing by the company\u2019, 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.<\/p>\n

In addition, a high proportion of Directors\u2019 Holdings may imply that management has a stronger voice in corporate governance and can effectively promote the implementation of the company\u2019s strategy. For an enterprise with a clear development direction, this can enhance the company\u2019s competitiveness in the market.<\/p>\n

Low Proportion of Directors\u2019 Holding<\/h3>\n

When the proportion of Directors\u2019 Holdings is low, or there is a significant decline, the market\u2019s interpretation may go in the opposite direction. The market may interpret a reduction in management\u2019s shareholding as a lack of confidence in the company\u2019s 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.<\/p>\n

Such a change in market sentiment will often hurt a company\u2019s 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\u2019 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\u2019s operations.<\/p>\n

How to Observe the Changes of Directors\u2019 Holdings, 3 Major Channels to Teach You How to Enquire<\/h2>\n

Everyone likely already knows that changes in the shareholding of directors and supervisors are not just numbers\u2014they reflect essential signals about a company\u2019s 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!<\/p>\n

Directors\u2019 Holdings Enquiry Channel 1: Market Observation Post System<\/h3>\n

Investors can find information about Directors\u2019 Holdings in the Market Observation Post System (MOP).<\/a> This industry categorization system allows you to view information on Directors\u2019 and Supervisors\u2019 holdings within each company.<\/p>\n

Detailed operation steps:<\/p>\n

Click on \u2018Basic Information\u2019 in Market Observation Post System, select \u2018Directors, Supervisors and Major Shareholders\u2019 Shareholdings, Pledges and Transfers, \u2018then click on \u201cSummary of Directors, Supervisors, Managers, and Major Shareholders\u201d Shareholdings,\u2019 and then click on \u2018Market Segment\u2019 and \u2018Industry Classification\u2019 to find out the company you want to see.<\/strong><\/p>\n

\"Market
Market Observation Post System (MOPS) \u2013 Directors\u2019 Holdings<\/figcaption><\/figure>\n

Directors\u2019 Holdings Enquiry Pipeline 2: TEJ PRO<\/h3>\n

If you feel that the website\u2019s unintuitive design makes you feel disturbed when you are searching for the details of Directors\u2018 Holdings, we would like to recommend a more convenient channel for you to search for the details\u2014TEJ PRO! Simply log in to TEJ PRO and click on \u201cListed (OTC) Directors\u201d Holdings\u201d in the TEJ Company DB, and you will be able to get all the relevant information easily.<\/p>\n

\"TEJ
TEJ PRO Database of Directors\u2019 Holdings<\/figcaption><\/figure>\n

Directors\u2019 Holdings Enquiry Pipeline 3: TEJ API<\/h3>\n

In addition, the TEJ API can also be used to capture Directors\u2018 Holdings information. The following code captures the \u201cDirectors\u201d and Supervisors\u2019 Holdings\u2018, which is a detailed description of this database, including monthly announcements of Directors\u2019 and Supervisors\u2018 holdings of listed and over-the-counter (OTC) companies, and the companies\u2019 returns, public statements and annual reports submitted to the Taiwan Stock Exchange and OTC Markets.<\/p>\n

Here is an example of TSMC (2330).<\/p>\n

import tejapi\n# tej_key\ntejapi.ApiConfig.api_base='your base'\ntejapi.ApiConfig.api_key='your key'\ndata = tejapi.get('TWN\/ABSTN1', coid = '2330', mdate = {'gte':'2021-01-01', 'lte':'2024-07-31'}, chinese_column_name = True, paginate=True)\ndata<\/code><\/pre>\n
Partial output results:<\/p>\n
\"TEJ
TEJ API Schedule of Directors\u2019 Holdings<\/figcaption><\/figure>\n
The Friendliest Financial Data Tool\uff5cTEJ API<\/h2>\n
The proportion of Directors\u2019 Holdings and its changes are not only core data in corporate governance but also an essential indicator of the confidence of a company\u2019s senior management in its corporate prospects and a reflection of the market\u2019s expectations of the company\u2019s 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\u2019s operation and market performance.<\/p>\n
TEJ, with its various query tools and APIs, is a reliable source for investors to obtain detailed information on Directors\u2019 Holdings. This high-quality data enables investors to more accurately grasp the company\u2019s 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.<\/p>\n
TEJ not only helps you to collate all kinds of high-quality information on the history or the current day\u2019s trading of zero shares but also provides backtests of various strategies to help you optimize your investment strategy, so you don\u2019t 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!<\/p>\n
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Extended Reading<\/h2>\n