Insider pledging in the U.S

Utilizing a hand-collected comprehensive dataset covering U.S. public traded firms from 2006 to 2014, we present descriptive evidence regarding insider pledging behavior in the U.S. and study its determinants. We find an insider’s propensity to pledge company stock is positively associated with her risk exposure and pledgeability of company stock, and negatively with the company’s corporate governance quality. These findings suggest that risk-averse corporate insiders pledge to hedge. Further, we find ISS’s denouncement of pledging in 2012 reduces insider pledging.