The Empirical Study On The Effects Of The Equity Incentives Of Listed Companies In China

At present,Equity Incentives are subject to various concerns of the theory community,government, corporate and institutional investors.Equity Incentive has been widely used in Europe and the United States and other developed capitalist market and get good results.In China, Equity incentive started relatively late,it has not been widely used.The past three years has been more and more enterprises begin to try this new incentive mechanism.A large numbers of listed companies announced equity incentive plan draft into2010, which proved that equity incentives are gradually being attention to China’s enterprises.It can be said that it is a critical period to the development of equity incentive. The next few years, the listed companies implement executive equity incentive plan will become a trend.This article is to study the effect of equity incentives of the managers of listed companies in the macro environment in China, in order to provide some reference value of equity incentives in China’s development.In this article,both the incentive element and the corporate governance structure are considered to studying the effect of implementation of the manager incentive.The article is divided into five main parts:the first part to collate and summarize the previous literature.The second part describes the theoretical basis of incentive options,principles, mechanisms and related concepts.The third part of the data of the statistics of listed companies the incentive program, the equity incentive status of implementation of the listed companies in China; analysis of the characteristics of the implementation of incentive stock options listed companies.Part IV uses the method of empirical analysis to verify the intrinsic link between the various factors and the equity incentives of listed companies, and examined the effect of equity incentives of listed companies.The fifth part comes to the conclusion based on the other chapters. The conclusions of this paper are:1.elements of design:(1)corporate performance and incentive ratio is an inverted U-shaped relationship:agency costs will be reduced with the increase in the proportion of incentive.(2) The validity of the equity incentive design will affect enterprise performance corporate performance is first decreased and then increased and then decreased with the increase of the period of validity, the two factors showing the cubic corresponding relations.(3)The exercise price of incentive options will have an effect to business performance of, but this factor needs to embody the value of the shares of listed companies.4) various equity incentive models will have different incentive effects.2.Corporate ownership characteristics:(1)ownership structure on the incentive effects are significant, the higher the ownership concentration,the more it can reduce the agency costs,and improve enterprise performance.(2)Private enterprises in the implementation of equity incentive have a better effect than the state-owned enterprises.In response to these conclusions,the paper believe that in order to make the equity incentive fully play its role in our country,there should be a reasonable set of targeted equity incentive elements and improve the corporate governance structure, so that equity incentives will play actively role in China’s listed companies.