Independence indicators
A+ Any company with no recorded shareholder with an ownership over 24.99% (either direct or total), also companies with 6 or more identified shareholders whose ownership percentage is known.
A As above, but includes companies with 4 or 5 identified shareholders. A- As above, but includes companies with 1 to 3 identified shareholders.
B+ Any company with no recorded shareholder with an ownership percentage (either direct or total) over 49.99%, but having one or more shareholders with an ownership percentage over 24.99%, also companies with 6 or more identified shareholders whose ownership percentage is known.
B as above but includes companies with 4 or 5 identified shareholders. B- as above but includes companies with 1 to 3 identified shareholders.
C Any company with a recorded shareholder with an ownership (either direct or total) over 49.99%. The C indicator is also given to a company when a source indicates that the company has an Ultimate Owner.
U Companies not falling into the categories above, indicating an unknown degree of independence.
Continuous ownership concentration variables
C1 Percentage ownership of the largest shareholder C3 Combined ownership of the largest 3 shareholders C5 Combined ownership of the largest 5 shareholders C10 Combined ownership of the largest 10 shareholders C20 Combined ownership of the largest 20 shareholders H Herfindahl index of up to top 20 shareholders
Dichotomous control-type variables
OC1 Dummy = 1 if the largest shareholding exceeds (>=) 5% OC2 Dummy = 1 if the largest shareholding exceeds (>=) 10% OC3 Dummy = 1 if the largest shareholding exceeds (>=) 20% OC4 Dummy = 1 if the largest shareholding exceeds (>=) 30% OC5 Dummy = 1 if the largest shareholding exceeds (>=) 50% OC6 Dummy = 1 if the largest shareholding equals 100%
OC90 The probability that the largest shareholding can secure majority support in a contested vote exceeds 90% using probabilistic model.
OC95 The probability that the largest shareholding can secure majority support in a contested vote exceeds 95% using probabilistic model.
OC99 The probability that the largest shareholding can secure majority support in a contested vote exceeds 99% using probabilistic model.
Owner identities
A Insurance B Banks
C Industrial companies D Individuals or families, unnamed
E Mutual & pension funds/nominees/trusts/trustees F Financial companies
I One of more known individuals or families J Foundations/research institutes L Bulk lists of companies and private owners M Employees/managers/directors S Public authorities, states, governments
Z General public (only applies to publicly listed companies)
Power of multiple large shareholders H_diff =(OW1-OW2)2+(OW2-OW3)2
OW1: Largest shareholdings; OW2: Second largest shareholdings; OW3: Third largest shareholdings
H_con =OW12+OW22+OW32
Definitions for OW1, OW2 and OW3 are as above.
SV Shapley value solution for the largest shareholder in a three large shareholder voting game
Performance Variables
ROA Return on assets ratio = (Net Income before Preferred Dividends + ((Interest Expense on Debt-Interest Capitalized) * (1-Tax Rate))) / Last Year's Total Assets ROC Return on invested capital ratio = (Net Income before Preferred Dividends +
((Interest Expense on Debt - Interest Capitalized) * (1-Tax Rate))) / (Last Year's Total Capital + Last Year's Short Term Debt & Current Portion of Long Term Debt)
ROE Return on equity ratio = (Net Income before Preferred Dividends - Preferred Dividend Requirement) / Last Year's Common Equity
PMG Gross profit margin = Gross Income / Net Sales or Revenues
PMO Operating profit margin = Operating Income / Net Sales or Revenues TQ Tobin’s Q = Market capitalization/total assets
MTB Market to book ratio = Market capitalization / ordinary capital reserves
Other variables
SizeTA Log(total assets)
Lev Leverage ratio = Long term debt/total assets
IAInt Intangiable assets intensity = Intangible assets/total assets
Beta Market risk variable, which is the beta coefficient of the Security Characteristic Line:
ra = αa + βa rm + εi
where ra is the return of an individual asset, and rm is the return of a market portfolio (a representative stock index). Returns are calculated as monthly changes in market prices.
CInt Capital intensity = Total capital % total assets
FCF Free cash flow = Log(net cash flow – capital expenditures)
Industry classifications
N11 Extraction of crude petroleum and natural gas; service activities incidental to oil and gas extraction excluding surveying
N13 Mining of metal ores N14 Other mining and quarrying
N15 Manufacture of food products and beverages
N18 Manufacture of wearing apparel; dressing and dyeing of fur N21 Manufacture of pulp, paper and paper products
N22 Publishing, printing and reproduction of recorded media
N23 Manufacture of coke, refined petroleum products and nuclear fuel N24 Manufacture of chemicals and chemical products
N25 Manufacture of rubber and plastic products
N26 Manufacture of other non-metallic mineral products N27 Manufacture of basic metals
N28 Manufacture of fabricated metal products, except machinery and equipment N29 Manufacture of machinery and equipment n.e.c.
N30 Manufacture of office machinery and computers
N31 Manufacture of electrical machinery and apparatus n.e.c.
N32 Manufacture of radio, television and communication equipment and apparatus N33 Manufacture of medical, precision and optical instruments, watches and clocks N34 Manufacture of motor vehicles, trailers and semi-trailers
N35 Manufacture of other transport equipment N36 Manufacture of furniture; manufacturing n.e.c. N40 Electricity, gas, steam and hot water supply N41 Collection, purification and distribution of water N45 Construction
N50 Sale, maintenance and repair of motor vehicles and motorcycles; retail sale of automotive fuel
N51 Wholesale trade and commission trade, except of motor vehicles and motorcycles
N52 Retail trade, except of motor vehicles and motorcycles; repair of personal and household goods
N55 Hotels and restaurants
N60 Land transport; transport via pipelines N61 Water transport
N62 Air transport
N64 Post and telecommunications
N65 Financial intermediation, except insurance and pension funding N67 Activities auxiliary to financial intermediation
N70 Real estate activities
N71 Renting of machinery and equipment without operator and of personal and household goods
N72 Computer and related activities N73 Research and development N74 Other business activities21
N75 Public administration and defence; compulsory social security N90 Sewage and refuse disposal, sanitation and similar activities N92 Recreational, cultural and sporting activities
N93 Other service activities
21 These activities include legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy; holdings; architectural and engineering activities and related technical consultancy; technical testing and analysis; advertising; labour recruitment and provision of personnel; investigation and security activities; industrial cleaning; other business activities n.e.c.
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