A Study On The Factors Affecting The Choice Of Equity Incentive Mode Of Listed Companies In China

With laws and regulations improvement since year 2006, the increasing number of listed companies in China began to implement the equity incentive plan. China equity incentive gradually entered a mature stage of development. As a key element, equity incentive model is an important factor in the implementation of equity incentive. The study of the factors affected listed company equity incentive mode selection will have a major impact in the healthy development of equity incentive theory in China.Currently the research focuses on the correlation of equity incentive and corporate performance and the factors affect the equity incentive effect. There is a lack of theory and empirical research on equity incentive contract elements. Stock options and restricted stock are the two main modes of equity incentive. Based on a comparative analysis of mentioned models, corporate identity, ownership structure, financial condition and internal corporate governance might be factors that affected the listed company equity incentive mode selection. By using Logistics regression method testing bulletin Equity Incentive Plan(draft) of listed companies among year 2010-2014, it is concluded that the company’s growth, nature of actual controller as well as the independence of the board of directors are main factors affecting the selection of equity incentive model. In addition to the above factors, for high-tech enterprises, the corporate profitability also affected. The result indicates that high-tech enterprises are more regular comparing with traditional industries in the choice of equity incentive model. Through qualitative, quantitative and empirical analysis of equity incentive model, it proposes finding the most suitable mode for companies, promoting the state-owned enterprise manager market-oriented process, building healthy capital market and institutional environment and strengthening the role of independent directors.