The Study About Equity Incentive Of Chinese Listed Companies

The “ownership-management power separating” management mode gives rise tothe problem of appointed agency, such as “moral crises” and “adverse selection”. Inorder to prevent similar problems, we have to provoke and bond the operators, thusemerges the share incentives system-a long term incentive system.The share incentive system first originated from the USA, which is a widelyadopted payment mode in many western countries. In China, the application of thissystem is still in its beginning phase, due to the fact that the development ofcorporation system was relatively late. The law foundation and the marketenvironment have been improving and the share incentive system has beendeveloping since the2005equity separating reform, and more and more quotedcompanies have adopted this system in hope of improving their companies’performance. Against this background, this research is hoped to analyze whether thissystem is effective in improving the quoted companies’ performance.First, this research referred the existing accomplishments in related theories andempirical analysis, systematically concluded the researches done by the researchershome and abroad. The existing studies mainly fall into two categories: theoreticalstudies and empirical studies. And in empirical aspect, the researches are mainly donefrom the perspectives of insignificance incentive, significance incentive and intervaleffect. Then the related concepts and theoretical foundation of equity incentives wereintroduced and the necessity, on which basis this research analyzed the currentsituation and implementation characteristics of this system in the quoted companies inChina. Next this research analyzed the integral effect and the influence onperformance and share prices after implementing the equity incentive measures in thequoted companies in China. At last, this research put forward some suggestions fromthe perspectives of law environment, marketing environment and the company’sequity incentive plan design according to the implementation situation of this systemin quoted companies in China.