Research On The Impact Of Equity Incentives To Listed Company Performance

Separation of ownership and management lead to the principal-agent theory. The rational is who the main body of economic decision-making is full of sensible, skilled judgment and calculation, and their main economic activities are self-serving, and their only goal is to pursuit to maximize their own economic interests. In the" rational person" assumption, the owner and operator pursuit of their own interests, there exist conflicts of interest, as a concrete manifestation of the moral risk and adverse selection. Then shareholders of the listed company should select a mechanism to constrain the management of moral hazard and adverse selection caused by the management to deviate from the shareholders’ interests. Human capital and the modern contract theory points out that management capability can promote economic growth, Schultz think current human capitals the main cause to promote national economic growth. As one capital of the corporation, management capability should partake surplus value distribution. Then, the equity incentive can ease the contradiction between owners and operators, and reduce the management cost of supervision in contractual relationship to some extent.In recent years, more and more listed companies executive stock option incentive to manager and technician. One hand the owner of the company hope that through this equity incentive methods to combine management and shareholder interests, to enhance the enthusiasm of company senior management to operate, to reduce shareholder agency costs; on the other hand, the rapid developing company put funds into research and development, and the stock option plan use less cash flow, can reduce the company’s cash flow pressure. But in our country the impact of equity incentive to listed company performance is not obvious. In this paper, we research on series of problems, the impact of incentive proportion, stock options valid and size of the company to company performance; whether there exists a best point or a best interval that the proportion of equity-based incentives can promote the growth of enterprise performance. It is great theoretical and practical significance to advance our country listed company equity incentive mechanism and further development. On the basis of equity incentive theory and company performance evaluation method, the paper choose financial index to analyze company performance, find that the most company performance raise, which implement equity incentive. On the basis, the paper selects74sample data that is from2007to2010to research on the impact of incentive stock options to company performance. Research shows that equity incentive is helpful to improve the company performance.In the first part, it describes the backdrop and the theoretical and practical significance of equity incentives on firm performance, mainly elaborated the research background and significance. It reviews domestic and foreign to the equity incentive and corporate performance research, and point out the research ideas and methods, research and innovation and shortcomings of the paper. Previous existing literature divided the relationship between equity incentives and company performance into three parts:Equity incentives and company performance have a linear relationship; Equity incentives and company performance have a nonlinear relationship; Equity incentives and company performance have a no relationship. On this basis, it proposes the idea of this study:it summarized and analyzed up to the present empirical findings on equity Incentives and corporate performance, refer to this study of the literature selection; Described the history and development of China’s listed companies in the implementation of equity incentive status quo; Explain the equity incentive concept and put forward the theory of hypothesis; Select the sample companies and the assessment of corporate performance indicators and raised assumptions, Empirical research, the empirical results verify the hypothesis put forward for equity incentives and company performance impact of the sample companies. The paper takes a combination of normative and empirical research methods, and quantitative and qualitative analysis research methods.In the second part, it conducts the theoretical analysis of effect on corporate performance, mainly introduces relevant concepts and theoretical hypotheses, and method of company performance evaluation. Related theoretical analysis of the impact on corporate performance for the equity incentive on the meaning of incentive stock options, incentive stock options related concepts of classification, characteristics and the role of incentive stock options to explain the company performance evaluation index selection method, applicable conditions and the advantages and disadvantages of performance indicators, we have chosen the traditional financial indicators to measure corporate performance.In the third part, the paper analyzes China equity incentives’development and present state. The third part, the first based on previous literature in combination with Chinese institutional background described in the course of development of equity incentives of listed companies, first introduced into China from the equity incentive equity incentive in our history and development; incentive status quo of China’s OListed Companies incentive programs, statistics, statistical analysis of the incentive model of the sample companies, the industry distribution, and pointed out the reason.In the fourth part, this paper applies empirical study on the listed company equity incentive and corporate performance, mainly using SPSS management statistics software to the selected samples related data for significance analysis and linear regression analysis, thus obtains our country listed company equity incentive and corporate performance the conclusion whether exists a relation.The fifth part gives the conclusion of the study and suggestions. According to company equity incentive and corporate performance:theoretical analysis and empirical analysis of the results, combined with our country company equity incentive situation, draw lessons from foreign equity incentive experience, put forward to perfect the equity incentive recommendations in the form.