The Research On The Relationship Between Managerial Equity Inventive And The Performance Of Listed Company In China

Equity incentive, as a kind of long-term excitation mechanism, is to reduce agency cost, improve business efficiency and maximize shareholders'wealth. In the early years, many west enterprises began to carry out equity incentive and succeeded. In order to learn it, a few enterprises attempted equity incentive. With the promulgation of The Measures Governing Equity Incentive Plans of Public Companies (For Trial Implementation) on December 31,2005, many enterprises went for it. By the end of December 31,2010, there are about 201 enterprises launched plans about equity incentive. However, our country still remains in primary stage. We don't know whether the equity incentive will work or not. So the research on equity incentive is an important topic. The article is aiming at the research on relation between comprehensive performance and equity incentive of the pulic companies. Firstly, the article introduces the background, significance, and the line of the research. Secondly, it analyzes theory about equity incentive, including related definitions and base theory, such as principal-agent theory, human capital theory. Then it analyzes the related research findings at home and abroad and finds out that there are three conclusions:positively correlated, negatively correlated or uncorrelated. Through these analysis, it also introduce current situation about equity incentive, including macro-environment which tells the development of equity incentives in China. It also includes some statistics. Then basing on the information, the article advances three hypotheses and verifies these hypotheses by tools. It reaches a conclusion:the two is corelated, and there is an effective correlativity between shareholding ratios of management directors and company performance. Moreover, mode of equity incentives is related with company performance, but not a significant correlation with company performance. At last, according to the conclusion, it also suggests some advices to improve the institution of equity incentive. For example, complete the capital market, laws and regulations, insider control, the underdevelopment of manager markets, and performance evaluation system.