Analysis On Effects Of The Equity Incentive Of Chinese Listed Companies

The equity incentive as a long-term incentive system, is significant for improving the corporate governance structure, reducing the principal-agent costs, retaining and attracting talent, improving company performance, and promoting the sustainable development of company. It is widely used in mature capital markets, such as Europe and the United States while it is not introduced in china until the 20th century 90 years. With the completion of the share reform and the issuing of relevant regulations on the equity incentive, more and more listed companies launch equity incentive plans.Based on review of research about the incentive equity effects of western and domestic scholars, the paper introduces the basic theory of the equity incentive, and systematically sorts out the promotion process of the relevant policies on the equity incentive in China. The paper makes a systematic and comprehensive description of the statistical analysis on the equity incentive being implemented of Chinese listed company after the share reform by business type, industry distribution, equity incentive model, and the stock source, etc. The paper discusses the constraints of the effects of the equity incentive. With the sample of implementing the equity incentive in Chinese listed company after the share reform, the paper makes an empirical study on the incentive equity effects:firstly, by horizontal comparison, the result suggests that the performance of the listed company which implement the equity incentive plans is superior to the one which did not disclose that; by vertical comparison, the result suggests that the listed company performance did not significantly increased after the implementation of the equity incentive plans. Secondly, the paper studies the relationship between the equity incentive and the company performance through the multiple regression analysis on the basis of introducing relevant control variables. The empirical study finds the equity incentive is positively related to the company performance, but not significant. Finally, the paper proposes countermeasures to improve the effects of the equity incentive in Chinese listed company from the aspects of the corporate governance structure, stock market, professional managers market, the relevant laws and regulations, appraisal standards of the performance.