A Study On The Equity Incentive Of China 's Growth Enterprise

The Chinese GEM has a history of more than 5 years. As an actively prospering power in capital market, we’ve witnessed such significant development and ceaseless expansion. At the end of 2014, there are 407 companies listed on the GEM market. In terms of the companies on the GEM, the significant characteristic they share is that they have higher growth and higher uncertainty, and the main problem is the most important feature of the GEM companies have faced. Thus, by introducing and retaining talent to achieve sustainable development of enterprises, the development of the GEM companies have extraordinary strategic significance. Equity incentive system has been demonstrated in the western developed market economies is a good incentive and restraint mechanisms to resolve it by the principal-agent conflict lie between shareholders and management and to achieve long-term development. Nowadays, the equity incentive system is being increasingly adopted by GEM companies, taking root and emerging in the soil of the Chinese capital market.However, due to the special nature of our country, the construction of capital market still needs to be improved in this period, and the laws, regulations and institutional system is still not perfect. Therefore, the equity incentive in our country is not in function well, there have been some problems to be solved. Whether it functions well or not still remain to be seeing. If the answer is not, then why does it not function well? Then how to take some measures to improve the equity incentive system to serve the ? These are the articles need to answer the question.This paper is consisted of four parts components: First, the article builds a research framework about equity incentive, then reviews the domestic and international research on incentive stock options, introduces concepts related to equity incentive and various incentive model; then, from a different angle analyzes the development status of the implementation of equity incentive GEM, GEM equity incentive and the current problems faced in implementation are analyzed; the third part of this paper is the empirical analysis of GEM companies equity incentive to 2011 announcement and implementation GEM equity incentive companies as samples, by analyzing the sample enterprises to improve financial performance to evaluate the situation before and after the implementation of the implementation of equity incentive effect, through empirical analysis, this paper draws between equity incentives and weak financial performance related conclusions. Subsequently, the paper analyzes the underlying causes of non-effectiveness of the GEM equity incentive. Finally, the conclusions are based on empirical analysis and exploration of reasons, this article raises some suggestion from the capital markets, corporate governance and the project of specific mechanisms.