do you think that institutional investors favor or oppose significant
managerial stock ownership?

The answer to your question is the following:

First of all, by institutional investors, I am assuming you are
referring to mutual funds, pension funds, insurance company funds, and
funds affiliated with commerial and investment banks.

Institutional investors do not seem to be concerned about siginificant
ownership as an issue of compensation (for instance, Yahoo's CEO
received a total comp package of $240 million in 2005, most of it in
stock).

However, as far as executive compensation as a percentage of
outstanding shares, they DO care.  Quite simply, when a significant
amount of shares are held by insiders, the float is decreased and Wall
Street analysts tend not to provide as much research coverage because
the supply-demand dynamics of the stock do not make it as good of an
investment for institutional investors, who take large positions. 
There are some exceptions however.

Also consider that many small caps often have a large percentage of
shares owned by management.  But often institutions will buy the stock
if it is deemed a good prospect.  There is a certain level of
expectation that newer companies will have much of the stock owned by
insiders and the notion that they will sell gradually, as Michael Dell
and Bill Gates have done and continue to do.  This eventually makes
the stock more liquid and institutions absolutely need liquidity,
since their investors are liquidating all the time.

The answer to your question is the following:

First of all, by institutional investors, I am assuming you are
referring to mutual funds, pension funds, insurance company funds, and
funds affiliated with commerial and investment banks.

Institutional investors do not seem to be concerned about siginificant
ownership as an issue of compensation (for instance, Yahoo's CEO
received a total comp package of $240 million in 2005, most of it in
stock).

However, as far as executive compensation as a percentage of
outstanding shares, they DO care.  Quite simply, when a significant
amount of shares are held by insiders, the float is decreased and Wall
Street analysts tend not to provide as much research coverage because
the supply-demand dynamics of the stock do not make it as good of an
investment for institutional investors, who take large positions. 
There are some exceptions however.

Also consider that many small caps often have a large percentage of
shares owned by management.  But often institutions will buy the stock
if it is deemed a good prospect.  There is a certain level of
expectation that newer companies will have much of the stock owned by
insiders and the notion that they will sell gradually, as Michael Dell
and Bill Gates have done and continue to do.  This eventually makes
the stock more liquid and institutions absolutely need liquidity,
since their investors are liquidating all the time.

BTW I am a former Wall Street pro but this is based on my own theories
and expereince.