NEW YORK, April 4, 2002 - Institutional investors hold more than 60 per cent of shares in most large, multinational companies, according to the latest PricewaterhouseCoopers Management Barometer survey.   Institutions that are value and growth investors own a total of 48.5 percent of all shares in surveyed companies, and management holds them in considerably higher esteem than institutional shareholders replicating an index or those having an income focus, who hold an additional seven percent and 5.5 percent, respectively. Despite the significant ownership stake represented by institutional investors, survey respondents believe institutions wield only limited influence over company strategy.  Just 37 percent of surveyed executives said institutional investors exert strategic influence, while 26 percent said institutions have no impact on corporate direction, and 34 percent rated them neutral.  According to surveyed executives, big institutional investors are majority shareholders in 64 percent of their US-based multinational companies--and minority investors in another 22 percent.  The remaining 14 percent are either privately held or foreign owned. “The concentration of ownership by large institutional investors gives them a significant opportunity to influence management strategy. Yet, with a few visible and highly publicized exceptions, institutions are not exerting their clout,” said Frank Brown, global leader of assurance and business advisory services for PricewaterhouseCoopers. Among the companies surveyed, institutional investors hold an average of 61 percent of total shares. In addition: the top 10 investors typically own 26.9 percent of all shares; the top five, 19.3 percent; and the largest, 8.6 percent.  Retail investors own the remaining 39 percent of shares.  Respondents said they would like to retain essentially the same ownership mix, 62 percent institutional, and 38 percent retail, over the next year or so.  According to the survey, executives believe institutional value and growth investors have a better understanding of their companies than institutions focused on income or various stock indices, whose charter does not require them to follow companies as closely:  ·        Understanding of Strategy.  Overall, 88 percent of those surveyed rated institutional investors as well informed about their company’s short- and long-term strategy. Only nine percent saw them as not well informed.  More value and growth investors were seen as well informed, 77 percent and 63 percent, respectively, than income investors (38 percent) or index investors (32 percent). ·        Sophistication of Financial Models.  Respondents said 72 percent of value investors, and 69 percent of growth investors have sophisticated financial models. Thirty-five percent of both income and index investors have such models.  Problems Obtaining Information About Ultimate Shareholders Although top executives are amenable to institutional investors holding large stakes in their companies, they voiced some dissatisfaction in their ability to communicate to their ultimate shareholders – the clients of the institutions. This is evidenced on two levels: ·        Street accounts.  Executives estimated that 49 percent of their shares are held in street accounts. And 60 percent say administrators of these accounts are either not particularly helpful (32 percent), or not at all helpful (28 percent) in providing information on their ultimate shareholders. ·        Central depositories. Forty–six percent of companies said central depositories hold a portion of their shares. Among those, almost half (49 percent) say the depositories are not helpful in providing information on the ultimate shareholders, while 31 percent say they are only somewhat helpful. “There’s a growing trend toward increased transparency and accountability in corporate reporting. It’s difficult for management to be responsive to the needs of its shareholders when a significant percentage of them are held anonymous,” noted Brown.  PricewaterhouseCoopers’ new “Management Barometer” is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc. PricewaterhouseCoopers (www.pwcglobal.com) is the world’s largest professional services organization.  Drawing on the knowledge and skills of more than 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world. PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organization.