The Impact Of Corporate Governance Structure And Equity Incentive On Behavior Of Senior Managers’Holding Reduction

Since the first-batch GEM companies were listed the Shenzhen Stock Exchange for a full year, senior managers frequently resigned and occurred a large number of senior managers reduction. This paper through discussion whether the corporate governance structure and equity incentive have some restriction effect on the senior managers’ holding reduction, and then provides some insights to regulate the senior managers’ holding reduction.Based on the experience listed companies encountered the senior managers’ holding reduction between November2010and October2012as research samples, through theoretical and empirical analysis, we found that:In the aspect of corporate governance structure, ownership concentration and whether to appoint professional managers both have a significant role on the level of GEM reduction of company senior managers. The higher the degree of concentration of ownership, lower level the senior managers’ reduction; The company appoints professional managers has lower level of senior managers’ reduction than non-appointment of professional managers. While equity balance degree and the proportion of independent directors have a certain impact on the level of GEM reduction of company senior managers, but the impact was not significant.In the aspect of equity incentive, proportion of executive stock ownership has a significant role on the level of GEM reduction of company senior managers. The greater the stake, lower level the senior managers’ reduction. The equity incentive intensity has a significant role on the level of GEM reduction of company senior managers. The greater the proportion of executives’ equity incentives amount of their remuneration, lower level the senior managers’ reduction.Finally, the study has put forward a number of policy recommendations to standardize the behavior of senior managers based on the conclusions.