The Degree Of Listed Company Equity Incentive Impact Studies On Cash Dividends

On December31,2005, the measures for the management of the listed company equity incentive was tried out, which marked really implement of our country’s equity incentive system from the policy level. On the one hand, introducing equity incentive system can reduce the agency cost of the enterprise and incentive executives play to subjective initiative. What’s more, this system contributes to focus on long-term goal of enterprise development for executives, realizing executives and shareholders agreement. On the other hand, the stock option incentive belongs to the long-term incentive in compensation structure, which is significant to attract talent and achieve the company’s strategic goals. With a series of legal documents issued, a favorable policy environment has been perfected for equity incentive’s implementation of the listed companies. However, it remains to be further discussed that the implementation of equity incentive system in China has played its effectiveness. Therefore, under the background of our country’s special stock option incentive system (dividend protected stock options), combining with the dividend signaling effect, this paper tries to analysis the effect of stock option incentive’s implementation in our country from the perspective of cash dividends. The research provides a positive reference for China Securities Regulatory Commission and the listed companies to strengthen supervision and improve the internal governance structure.This paper is based on the principal-agent theory, control theory and other related theories, and draws lessons from domestic and foreign scholars’ research achievements. At the same time, avoiding the empirical data influenced by the implementation of new accounting standards in2007and the Financial Crisis in2008, this article selects the listed companies as samples, Which have announced the plan of stock option incentive in2009-2012.It is reasonable to analyze the effect of equity incentive on cash dividends. Firstly, this paper introduces the background of the equity incentive system’s development, and the overall status quo of equity incentive implemented. Meanwhile, statistical analysis is applied to the degree of equity incentive and cash dividends’ distribution structure. It is important to illustrate the principle of the relationship between equity incentive’s degree and cash dividends. Secondly, it puts forward the research hypothesis and sets up the relevant variables, which introduces four indicators standing for equity incentive’s degree, respectively covering the quantity and value of granting options, as well as the number of people motivated. It is better and more roundly to reflect the degree of equity incentive that paper calculates the composite scores of equity incentive’s degree through principal component analysis. Afterwards, this paper uses related statistical software to operate descriptive statistical analysis for main variables, as well as encourages the composite scores of degree as dependent variable applied to analyze the overall samples and contrast samples.This research not only tests the positive impact on cash dividends, but the preference of equity incentive’s degree effect on cash dividends in different institutional environment, features of corporate governance and motivating factors designed. Lastly, according to the research conclusions, this paper puts forward some policy suggestions, including the incentive scheme design, optimization of corporate governance structure, establishment of a mature manager market, market efficiency’s improvement and improvement of relevant policies and regulations, which gives full play to motivate positive effects.