Empirical Research On Equity Incentive And Corporate Performance Of State-owned Listed Companies

As a long-term incentive system of the company’s managers and employees in the company’s management, the equity incentive has got extensive development and achieved good results in many foreign countries. However, if used improperly, the equity incentive will bring the huge disaster to the company and even the society. Compared with western countries, China’s equity incentive system produces late. China’s state-owned listed companies take on its characters compared with generally listed companies. In addition, there are several problems such as the weak effectiveness of the capital market, management faultiness, and the unsanitied relevant laws and regulations. In this institutional environment and market environment, the study of the relationship between equity incentive and corporate performance in state-owned listed company has a certain theoretical and practical significance.The paper first analyzes the theoretical foundation of equity incentive, including the principal-agent theory and incentive theory. Then, it analyzes the evolution process of equity incentive, providing a practical foundation for empirical research. Then, it makes an empirical study of the relationship between the equity incentive and corporate performance, using management stake as explanatory variables to measure the level of equity incentive, earnings per share to reflect the corporate performance of listed companies, at the same time using the natural logarithm of the total assets and asset-liability ratio as a control variable to build the regression equation. After a series of strict screening, it gets30state-owned listed companies annual report data during2009-2011. Meanwhile, in order to carry out a comparative analysis of research, it screened annual report data of30non-state-owned listed companies during2009-2011.This article gets the following conclusion through empirical analysis:the level of equity incentive and corporate performance was negatively correlated for the state-owned listed companies, but not significantly; For the non-state-owned listed companies, the level of equity incentive and corporate performance exist significant positive relationship. This proves that in terms of the state-owned listed companies, the implementation of equity incentive not only failed to produce the incentive effects of non-state-owned listed companies, but had a negative effect. This is not consistent with the previously mentioned principal-agent theory and incentive theory. The reason is that the internal environment and the external environment of the state-owned listed companies are imperfect. Therefore, in order to promote the development of state-owned listed company equity incentive system, it is necessary to improve the governance structure of the state-owned listed companies, to compete professional manager market, to foster efficient capital markets, and to improve the policies and regulations of equity incentive.