The Empirical Research On Timing And Effects Of The Equity Incentive Plans

After the split share structure reform,equity incentives system in China has been gradually important.However,the timing of the announcements of stock options incentive plans is still widespread,because of the defects of the stocks market and the principal-agent problem.Most listed companies chose the stock options plans to incite the managements,so this paper based on the principal-agent theory and rent-seeking theory,reference the foreign research methods,and use the stock options incentive plans which announced from 2004 to 2008 to research the timing and effects of the these incentive plans.We find that most listed companies tend to implement the incentive plans when the stock prices were falling down.The CAR after the implementation of the incentive plans is related negatively to the overall trend of the stock market and the individual stock price movements' trend.Most listed companies tend to implement the incentive plans before the announcement of good news,and the CAR after the implementation of the incentive plans is related positively to the announcements of the good news.We believe that the timing of the implementation of the stock option incentive plans does exist,and the rent-seeking of the managements does exist.