Do Insiders Actually Earn Abnormal Returns in the Long-Run?
Seidman College of Business
Numerous studies to date have addressed short-term returns earned by insiders with mixed results. Longer-term performance of executives and directors, however, has not been addressed in the literature. In this paper, we shed light on whether insiders actually earn abnormal returns in the long-run by deriving a more accurate and comprehensive measure of insiders realized returns. Key results from insiders dollar-weighted returns, which explicitly account for capital flow timing and magnitude from all SEC-reported insider transaction, show that insiders fail to earn significant returns in their overall portfolio during their tenure with the firm.
Financial Management Association
Simpson, Thuy and DeFusco, Richard, "Do Insiders Actually Earn Abnormal Returns in the Long-Run?" (2013). Faculty Scholarly Dissemination Grants. 1057.