Research On The Tendency Of Listed Companies In Choosing The Main Equity Incentive

The relationship between the managers and shareholders of listed companies is principle-agent. Because their goals are different, so it is necessary to through the appropriate incentive and restraint mechanisms to guide and limit manager’s behavior. Since1950s, Equity incentives originated in the United States. Our country use equity incentive is very late compared to the foreign countries. Equity incentive is first appeared in1993Shenzhen Vanke Co., LTD. The data shows that our country has only nine companies put forward the equity incentive before2006."Equity incentive measures for the listed companies" is issued in2006, it Signs equity incentive is formally began in china.With the policy laws and regulations improvement, the listed company which uses the incentive equity is increasing in China. From2006January to2009September, A total of340a-share listed companies use the incentive equity. This paper studies incentive equity mode, The author hope to answer the following questions:(1)What is the difference between the stock options and restrictive stock;(2) Which factors influence China’s listed companies choose the incentive mode;(3)Does China’s listed companies have the tendency to select the two equity incentives.Based on the above research ideas, this paper is divided into six chapters, each part is organized as follows:Part one, Introduction and Review of the equity incentive History; Part second, the literature review, review the status of domestic and foreign equity incentive management; Part three, Overview and theoretical basis of equity incentive, the chapter analyzes the advantages and disadvantages of the use of the seven equity incentives; Part four, listed companies in China equity incentive application, the chapter focuses on the restricted stock and stock options to do a comparative analysis; Part five, study which factors influence China listed companies choose the incentive mode; Part six, research results and policy recommendations.By theoretical analysis, the writer answer the question one that:the gap between stock options and restricted stock are in the incentive and punishment, grant price and exercise price, dividend protection, conditions of the incentive target the sale of shares the risk preferences of managers and corporate financial statements to six areas.In Empirical research, equity incentive is explanatory variables. Discuss the properties of corporate growth in the industry, market expansion and staff growth, executive’s stake in the company size, capital market valuation and corporate governance, the proportion of independent directors, two occupational settings, and the ultimate control of human nature as well as the company’s cash flow choose the incentive mode. The writer answer the question two that:(1) the company which choose stock option shows the much growth rate of main business income and the proportion of managerial ownership significantly higher than that of restricted stock of listed companies;(2) The faster the market expansion of companies and industries are new company, the more likely to choose stock option incentives, while companies with large scale enterprises tend to choose the restricted stock;(3) Based on the above five growth indicators, factor analysis of the company’s growth index is highly positively correlated with equity incentive, that means the higher the growth of enterprise, the more likely to choose stock option incentive;(4) Executives stake and equity incentives have a significant positive correlation, indicating the higher managerial ownership percentage, the more likely to choose stock option incentive;(5) The cash flow with equity incentives negatively correlated, that means the more adequate cash from operating activities companies, the more likely to choose restricted stock.The innovation of this paper is mainly embodied in the following two aspects:(1) the selected sample data for the latest2009year to2011year equity incentive data, Equity incentives of listed companies particularly affected by the policy, especially the three memorandums. The data which after2008year is more research and representation;(2) this article from the multi-angle analysis of the growth of listed companies, the previous literature only from a financial point of view static analysis of the company’s growth, I believe that this analysis only relies on historical financial data. An analysis of the company’s growth have to focus on the company’s future by the multi-angle vision, this is consistent with the Measurement of practice on the use of venture capital in the company’s growth.