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Chapter 5. Caffeine Badly Needed: Sleepy... > Red Flag 11: Directors Who Don’t Own...

Red Flag 11: Directors Who Don’t Own Much of Their Company’s Stock

When directors own very little of their own company’s stock, it says a lot about how they perceive their role and possibly about how they perceive the prospects of the company. Three Enron directors, for example, owned fewer than 6,000 shares of the company by the time it filed its proxy statement in March 2001. John Mendelsohn owned 5,563, Frank Savage 4,005, and Paulo Ferraz Pereira held 3,195. And, these were directors who received options on more than 10,000 shares in 2000 alone.


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