Analysis Of The Implementing Effect Of Equity Incentive Mechanism And Its Influential Factors In China

The equity incentive, as a long-term incentive way, arose after the separation of ownership and management, developed upon the Principal-agency Theory and Human Capital Theory. Good equity incentive can motivate the activity of the managers, and combine the benefits of the stockers, enterprise and the managers, to reduce the manager's short-time actions and make them show more consideration for the long-time development of the enterprise.With thirty years'grope and development, the equity incentive gets developed from the theory foundation to practice by leaps and bounds. With the development of our securities market and the success of the split share structure reform, listed company's encouragement restriction increasingly got attention, and especially the equity incentive. With the development of the split share structure reform, the opposing position between the benefits of floating shares and non-floating shares, listed company's governance structure will be improved, and the benefits of the managers and stockers will become identical, the owner and the managers will get together harmoniously .With the securities market becoming more effective, on the one hand, the stock's price will be more close to the value of the enterprise. On the other hand, the equity incentive to the listed company's managers will make market operation easy, and at the same time, the monitor from the market to listed company has better foundation, making them difficult to cheat, which creates good environment for listed company's equity incentive, and builds a good market foundation. However, with the performing of < the management of equity incentive in the listed companies > (first practice) in 2006, and the revision of corporation law and securities law which regulate the company capital system, redemption stock and transferring stock when the higher management holds an office , the legal barrier to the listed companies implementing the equity incentive has been eliminated.Under such circumstances, according to the situation of our country, it is very meaningful to study the implementing effect of equity incentive and the factors influencing the implementing effect of equity incentive from a new angle. That is combined with Human Capital Theory, Principal-agent Theory and Motivation-Hygiene Theory, in the meantime, the author makes use of the samples of A-stock listed companies in Shanghai and Shenzhen stock market and empirical method to validate how the implementing effect of equity incentive is and which factors will influence the implementing effect of equity incentive.This thesis consists of five parts. In the first part, the background and necessities of this research are explained, as well as the review of related literature domestically and overseas. The main content studied of this thesis is also summarized briefly in this part. For further study, the second part reviews the theories including Human Capital Theory and Principal-agent Theory related to equity incentive. This part can be used to build up the theoretical framework for the following empirical research. The third part clearly defines the implementing effect of equity incentive and analyzes the status of the effect of equity incentive in our country. The fourth part of this thesis is the empirical study of the factors influencing the implementing effect of equity incentive. In this part, first of all, the thesis carries on the gross test of the implementing effect of equity incentive in our country. Then according to the different research methods, the factors influencing the implementing effect of equity incentive scheme in our country are divided into two categories with the data of annual reports in CSMAR database and www.cninfo.com.cn.For the first category, the interaction variables are introduced into the model to make multivariate linear regression. For the other category, the variables are grouped to make empirical research according to different industry. The purpose is to find which factors influence the implementing effect of equity incentive. The fifth part is the last past of this thesis which summarizes the research conclusion. The conclusion shows that nowadays the implementing effect of equity incentive in our country is obvious and in those companies which have more growth potential, stronger competition (for example, information technology industry), smaller size, and higher risk level, the effect of equity incentive is more obvious. The author puts forward some policy advice for making and improving the equity incentive schemes from enterprise Micro-view and government Macro-view in the future. Finally, the shortcomings of this thesis are pointed out and the further study in this field is mentioned.