An Empirical Study On Equity Incentives And Corporate Performance Of Listed Companies In China

For modern enterprises,the existence of Principal-Agent relationship is responsible for the birth of equity incentive mechanism.By sending shares or equity of enterprises,the staff or senior executive will be so energetic and diligent to work that their interests concur with each other dynamically. With the deepening of reform,more and more listed companies are pleasant to implement equity incentive plans.The rapid development of equity incentive mechanism owe to “Listed Companies Incentive Management Approach(piloting)”that was promulgated by the China Securities Regulatory Commission on 31 December 2005. Based on the basis of statistical data from the China Securities Regulatory Commission,Up to the 31 December 2005,there are 603 equity incentive plans have been implemented in Shanghai and Shenzhen A-share market.In the case of equity incentive modes,using object orientation to encourage the issuance of new shares and using object orientation to encourage the issuance of new shares and granting options Account for a larger share.By means of empirical research,this paper makes preliminary evaluation on how the implement of equity incentive mechanism play an important role in improving the performance of company.The data come from Shanghai and Shenzhen A-share market between 2005 and 2014.The relationship between the implement of equity incentive mechanism and the performance of company is established mathematically.Based on the survey finding,I develop some recommendations that strengthening the validity of the capital market of our country and establishing and consuming professional manager market.What’s more,the improvement of relevant laws and regulations、the perfection of governance structure of listed companies and the development system of management performance of listed companies are also helpful for improving the corporate operational performance.