Research On The Negative Of Stock Incentive

The negative impact of Stock Incentive has become widespread social concern inrecent years. The negative mainly includes several aspects: key executives resign toget incentive bonus, false financial statements, free-riding phenomenon, and moralhazard. Controlling and solving those things have come to be a hot issue to beresearched.This thesis collects Stock Incentive plan draft on31Companies from GrowthEnterrises Market studies the negative of Key Performance Indicator (KPI) in Stockincentive; uses statistical methods including mean analysis, packet analysis andPROBIT regression analysis by the tools of EXCEL and SPSS. In the end, give thecorrelation and influencing degree of negative effects in Stock Incentive plan draft bythree factors including corporate governance structures, financial condition and firmcharacteristics.The results are:(1)On the Corporate Governance structure, only the ratio ofindependent director accounted for the total number of board directors can’t makecontribution to control of the negative. Other index including: the controllingshareholder stock, the ratio of independent director accounted for the total number ofboard directors, whether the General Manager and Chairman shareholding at the samesituation, the ratio of institutional ownership, whether the General Manager sharingholding and years he had been work, can make contribution to control the negative;(2)The finance condition index are important in controlling the negative of Stock OptionIncentive.(3)The attribute of the companies makes contribution to control the negativeof Stock Incentive while the scale doesn’t.According to the above analysis, the thesis gives advice to the “market price” and“cash value” index as the core evaluation index system for designing the KeyPerformance Index system. In order to support the Key Performance Indicator, weshould improve the Corporate Governance. On the one hand, the system of responsibility for the board of supervision must be established; on the other hand, thedirector system must be improved.