The Wealth Effect Of The Equity Incentive Preference Based On The Configuration Of Control Rights In The Listed Companies

Equity incentive as an effective long-term incentive in the modern enterprise system,receiving more and more attention. However, in the Chinese listed company’s practice,the implementation of equity incentive has the different effect, including manycompanies cancel the equity incentive and the company performance was declined whenthey carried out the equity incentive. So, can the equity incentive generate significantlypositive short-term wealth effect? The equity incentive of listed companies existsselective, is it in connection with the configuration of control power?Based on the Listed Companies in Shenzhen and Shanghai Stock Exchange Marketsbetween the years of2006to2011, eliminating the ST、SST、*ST company and so on,this article analyzed the present situation of equity incentive preference, including theconfiguration of control power, company equity structure and industry. Using the Eventstudy to analyze the wealth effect of equity incentive, and using the logistic regressionmodels to analyze the relationship between the configuration of control rights and thepreference of equity incentive, the findings show that:(1) equity incentive is able togenerate significantly positive short-term wealth effect, it can increase the company’svalue;(2) the configuration of control rights can effect the preference of equity incentive.Private companies prefer equity incentive more than State-owned companies; Thecompanies with the first shareholders who have stronger control power don’t preferequity incentive; There exist stronger equity incentive preference in the companieswhose board chairman has the dual position with the general manager; The higherconcentration of the ownership and shareholding of manager lead to higher preference toequity incentive.According to the conclusion, the different configuration of control power has thedifferent equity incentive preference, our country should establish the perfect andrelevant regulations and regulate the capital market, the listed company should becombined with their own actual conditions to choose equity incentive, and improve theinternal governance structure.