| dc.description | Corporate Governance is the system of control mechanisms, through which the supplier of
finance to corporations assures themselves of getting a return on their investment (Shleifer
and Vishny, 1997). The classical problem lies within the separation of ownership and control,
i.e. the agency cost resulting from a divergence of interest between the owners and the
managers of the firm (Jensen and Meckling, 1976). My research continues along these lines
of enquiry: it explores the link between share-holding pattern of top executives and firm
performance of three pharmaceutical Companies over the periods 2008 to 2012. Its
contribution is two-fold. First, I employ economic data of three companies getting from
disclosures of financial statements to determine return on equity (ROE) that represents the
firm performance. Second, I use exact shareholding percentage by top executives including
chairman, vice chairman, chief executive officer, chief financial officer, managing director,
company secretary and head of internal audit controlling for change in firm value due to
small change in shareholding pattern as in most of the cases shareholding pattern do not
change dramatically. To analyze the data, statistical tools and techniques that had been used
were simple linear regression, correlation coefficient (r), coefficient of determination (1°) and
student’s ‘t’ test at 5% level of significance. However, I find strong evidence in favor of the
impact of top executive’s shareholding pattern on firm performance that is measured through
ROE. ROE is an important measure for a company because it compares against its peers.
With return on equity, it measures performance and generally the higher the better. Some
industries have a high ROE as they require little or no assets while others require large
infrastructure builds before they generate profit. For this reason ROE is best used to compare
companies in the same industry. Performance ratios like ROE, concentrate on past
performance to get a gauge on future expectation. The higher the ROE, the more easily, the
company will be able to raise money for growth. In general, it's considered a sign of good
management when a company's performance over time is at least as good as the average
return on equity for other companies in the same industry. | en_US |
| dc.description.abstract | The paper investigates whether there is any relationship between top executives shareholding
pattern and firm performance in the three pharmaceutical companies listed in DSE and they
are Square Pharmaceuticals Limited (SPL), Beximco Pharmaceuticals Limited (BPL) and
Renata Limited (RL) for a period of five years (2008-2012). For determining the relationship,
the study has used statistical techniques like simple linear regression equation, correlation
coefficient and coefficient of determination. To test the formulated hypothesis, t test at 5%
level of significance has been applied. The main finding of this research is that there is
significant relationship between ownership structure and performance for RL but
insignificant for SPL and BPL Moreover, there are evidences that the top executives’
shareholding pattern have significant influence on firm performance. The contribution of this
research is that it would provide the most updated evidence on the relation between top
executives shareholding pattern and firm performance in the three pharmaceuticals company
listed in DSE that would be beneficial to the current and prospective investors in making the
right call to invest and getting maximum return. | en_US |
