Research On The Equity Incentive Effects And The Factors Of That Affect Listed Company In China

From January2006, China government has issued some rules and regulations related to equity-based incentive, such as the "Trial Approach for Management of LCEI", to guide its practice in listed companies. At the same time, the split-share structure reform which happened in2005brought an opportunity for the development of equity-based incentive. This scheme was adopted by many companies. The implementation of equity incentives is beneficial to the listed companies. In western countries, the implementation of equity incentives to improve the company’s performance has basically been verified, but because of our national conditions and the system of special effects, equity incentive effect on corporate performance is also in dispute. With the stock market has been gradually established and improved, equity as a long-term incentive mechanism, a number of listed companies in China have an important equity-based incentive as the company’s long-term incentives. The implementation of equity incentives implicates its future. Therefore, this paper using a real sense of implementation of the incentive stock listed companies, to analyze the equity incentives to explore the performance of listed companies influence and study the factors that affected the implement of equity-based incentives. It is a meaningful topic on how to make better use of this scheme to satisfy the owners of the company.This paper chooses the samples from listed companies which adopted equity-based incentives scheme from2006to2010. At first, This paper describes the implementation of equity incentive from listed companies characters and the equity-based incentive scheme. Then, we use comparative analysis in order to measure effectively the implementation of equity incentive effects. Firstly, study on the real implementation of the incentive stock listed companies and test the efficiency. Secondly, study on the samples in2006and test the efficiency. Thirdly, study on the listed companies who completed the equity-based incentive scheme. Based on previous studies, this paper selected seven factors which may affect the implementation of equity incentive effects to analysis, through the establishment of regression model, and ultimately concluded.In general, there have a certain effect of the implementation of equity incentive in the Chinese listed companies, but because of lack of capital market efficiency and inadequate of the corporate governance structure, the long-term effects of the implementation of equity incentive are not obvious. In addition, through the study of factors affecting equity incentive,the development of listed companies in the equity incentive programs should becomprehensive consideration many factors, in order to make equity incentive plan to achievedesired effect.