The Effects Of Stock Incentive In Listed Company

As a long-term incentive mechanism, stock incentive can connection mananges'interest with shareholders' interest, inspiring managers, and make company performance increasing best. many years of practice and study abroad have proven this point. The early 90s of the last century stock incentive had been researched in china.2006, China Securities Regulatory Commission promulgate "share of listed companies incentive management approach" and And the share reform is completed the full implementation. provide a good stock incentive the external environment. So in this context, the paper equity incentive effects of the problem and extent of the empirical analysis of influencing factors.This article research methods about stock incentive and analysis the status of our implementation, combined with previous studies, study the stock incentive effect from the market effect and the financial effect, with shanghai and shenzhen listed company which carried out stock incentive plans from 2006 to 2008. On the one hand from considering from external environment analyzing the effects of incentive stock options market, uing the event study, by calculating the cumulative equity incentive announcement excess returns before and after, study the market reaction to equity incentive investors. On the other hand, from the company's own point of view this paper analysis finanal effect adopted two methods, the one is select the accounting index, that it usually replaced company's performance, and stock incentive to do correlation. The other is establish company's performance evaluation system based the entropy method, and research the relationship bwteen stock incentive and company's performance. Finally, because of different stock incentive, enhance different degree the company's performance. This paper analysis the impact factors about the degree of relation between stock incentive and company's performance(known as the pay performance sensitivity).The empirical results show that:the introduction of stock incentives have had a positive market effects in china, and there is a lag; the empirical result indicate that stock incentives obviously have a positive effect; also found that company size, ownership concentration, R & D expenditures on the sensitivity of the impact of performance pay very significant; financial leverage, manager age, educational background, performance on the reward sensitivity was affected more significantly.Stock incentive has effects on incesering company's performance, and can be by adjusting the relevant factors, such as increasing R & D spending and employ a suitable age and educational background, management can improve the level of the company's performance to expand, this conclusion have some decision-making learn on listed companies that you want to or are being implemented incentive stock.