This paper examines the relation between changes in firm value associated with public equity issue announcements and management ownership, nonmanagement large block ownership, institutional ownership, information variables, and leverage. A significant negative relation is found between the ratio of announcement period abnormal returns to changes in manage? ment ownership and the level of management ownership. This result is consistent with Stulz (1988) who predicts that firm value increases at a decreasing rate as management control of voting rights increases. This finding is also consistent with improvements in alignment of interests, where such improvements diminish as management becomes entrenched. The announcement period abnormal returns appear to be unrelated to outside blockholdings (large block ownership or institutional holdings), information variables, or leverage. Research on corporate governance describes how a change in the distribu? tion of corporate voting rights may affect managerial behavior and shareholder wealth. Our primary purpose is to investigate the effect of public equity issues on firms' levels of management ownership and to examine the relation between management ownership and equity issue announcement period abnormal returns. We also examine how nonmanagement block ownership, institutional ownership, information effects, and leverage are related to the abnormal returns induced by public equity issue announcements. Several studies (Asquith and Mullins (1986), Masulis and Korwar (1986), and Mikkelson and Partch (1986)) investigate the effects of implied changes in management ownership resulting from common stock issues, as well as the share? holder wealth effects of common stock issue announcements. In these studies, changes in management ownership are observed indirectly by using the relative size of the equity issue as a proxy for the change in managerial holdings. The evidence provided in the prior studies is mixed, implying that relative issue size