Research On The Effect Of Executives’ Equity Incentives On Technological Innovation

With the rising of the comprehensive national strength in the world economy, China plays an increasingly important role, the current size of the economy has surpassed Japan to become the world’s second-largest economy. However, the persistence of economic growth is worrying, some economists advocate the transformation of economic growth mode, extensive growth based on cheap labor, high savings rates, high investment rate from the current steering intensive long-term growth based on technological advances and the resources to fully take advantage of type. Therefore, encourage Chinese enterprises to conduct independent innovation is essential. In recent years, corporate R&D investment in China is increasing, but corporate innovation competitiveness is not enough, and innovation efficiency is not high. Early resolution of the capability of independent innovation which is not strong, as soon as possible to establish a mechanism to improve to encourage independent innovation, has become an important part of the sustainable development of China’s science and technology and even the national economy as a whole.Equity incentive as an effective incentive, but also is part of the total compensation. Learn from experience of Western developed countries, corresponding equity incentives of business executives and core technical staff can promote the progress of enterprise technology innovation. So in this opportunity, this paper focuses on the impact of Hubei Province corporate executives’ equity incentive on innovative technological innovation. Firstly, finishing summarizes the theoretical basis of previous equity incentive impact of technological innovation, then analyzing the current development status of China’s equity incentive and development of innovative enterprises in Hubei Province, followed by doing the empirical study of executives’ equity incentives for technological innovation.For innovative enterprises in Hubei Province,do executives and directors’ stake, the annual remuneration of executives and directors, as well as state-owned shareholders’ stake have the impact of enterprise technology innovation? What is the impact? After this study, concluded as follows:for innovative enterprises of Hubei Province executives and directors’ stake has a significant positive correlation on technological innovation; The total annual remuneration of executives and directors does not have inverted "u" shaped relationship on technical innovation, so it does not have excessive incentives; The proportion of state-owned shareholding does not have much impact on technological innovation. And there are insufficient incentives for executives and directors’ shareholdings and total annual remuneration. Finally making several suggestions for innovative enterprises in Hubei Province, how to better implementation of equity incentive.