Research On The Implementing Effect Of Equity Incentive Mechanism And Its Inlfuential Factors Based On Listed Companies

As an important incentive mechanism innovation, equity incentive plays a positive effect oflong-term in reducing the agency cost, improving enterprise performance and promotingeconomic growth. That has been confirmed in the western developed countries. Equity incentivesystem started relatively late in our country, in contrast to foreign success and wide applicationwhich have been in practice. With completing the preliminary reform of the split share structurereform in2006, external environment is basically mature for implementing the equity incentivein China. Regarding equity incentive as an important long-term incentive mean, many listingCorporation have introduced incentive plans. It is very meaningful to study on effects of theequity division systematically and deeply after the reform of the listing Corporation equityincentive.As a relatively developed mechanism in foreign countries, did the equity incentive play itsdue effect in China and solve the principal-agent problem effectively? Whether do equityincentive plans implemented by Chinese listing Corporations combine with the actual situationof their enterprises and play incentive effect on the highest level? Whether do the corporategovernance structure and the policy system environment wield influences on the equity incentiveeffect and in what way? What feasible suggestions can be provided to improve the regulatorysystem and its environment? What are the creative inspirations to perfect the design andgovernance structure of company’s equity incentive program? These are the motive and key tothis research.From the ultra-endogenous perspective, this paper not only analyzes the incentive effect ofthe equity incentive contract elements, but also builds a bridge between the equity incentive andcorporate value by introducing intermediate variable. This research selects the corporategovernance and institutional environment as the moderating variables. Based on moderatingeffect model, it adopts hierarchical regression analysis method to explore the effect of corporategovernance and institutional environment on the equity incentive effect. The empirical resultsshow that:1、Each equity incentive contract element promotes the improvement of enterpriseperformance, especially the proportion and period of senior management incentive.2、Thecorporate governance structure significantly influences the implementation of equity incentive,of which the proportion of the first shareholder, ownership concentration, the board chairman and the general manager concurrently, the proportion of independent directors have played areverse effect.3、Institutional environment positively regulate the contribution of the incentiveintensity and incentive proportion to the corporate value creation, the relationship betweennegative regulation of incentive period, incentive model and enterprise performance.Finally, according to the above research and combined with the current situation andcharacteristics of the equity incentive in China, feasible policy suggestions directing at thedesign of equity incentive plan, the improvement of the corporate governance structure and theestablishment of a good institutional environment are provided to the company and thesupervision department respectively.