The Study On Equity Incentive In Our Listed Small And Medium-sized Companies

The primary goal of executive equity incentive is to align the interests of management with those of shareholders and to incentive management to maximize the interests of shareholders and the social value. As an effective long-run incentive mechanism tackling with all kinds of principal-agent problems in companies, equity incentive mechanism was first introduced in the 1950s, developed quickly in the 1980s. However, the abuse of equity incentive provoked a series of financial scandal in European and American countries in the beginning of the 21st century. Equity-based incentives system has also been widely questioned. And equity incentive system must be improved. The equity incentive was introduced and universally introduced for 9 years. The capital market was growing while the economic legal system and corporate governance structure has improved step by step during this period. Measures on Administration of Equity Incentive for Listed Companies were issued by China's Securities Regulatory Commission on 1 January 2006. Then equity incentive developed quickly in China.Although the academic community don't come to an agreement for the effect of the equity incentive, most people think that the equity incentive mechanism work on the development of small and medium-sized enterprises. This paper focus on the senior executive's stock-based incentive issue in our listed small and medium-sized companies. By analyzing the application status of equity incentive mechanism in China, the paper will give feasible theories and empirical evidence.This paper is composed of five chapters and logically can be divided into four parts. In the first part, we go over the fundamental theory of equity incentive mechanism. The application status of equity incentive mechanism in word and experiences oversea are included in the second part. We carry out study of the post-implementation effects of those companies in the third part. At last we make suggestions for the improvement of equity incentive mechanism in combination with the research of the existing problems.