Equity Incentive And Real Earnings Management

Ever since China securities regulatory commission promulgated the 《the listed company equity incentive management》in2006, Implementation of equity incentive of listed companies have sprung up fast growth,the equity incentive system had been generally accepted By the listed company. However, the equity incentive system, which is designed to solve the principal-agent problem, may cause new moral hazard behavior management in practice, In order to achieve the requirements of the equity incentive plan; the management may conduct earnings management. many scholars have studied the relationship between the equity incentive and the traditional accrued earnings management, The results of the study also found that many elements of equity incentive plan have a significant impact of earnings management, But the study of the relationship between the real earnings management and the equity incentive obviously too little, therefore, this paper use the research method of the study of accrued earnings management and equity incentive for reference to study the relationship between the equity incentive and the real earnings management.This paper adopted174samples from2006to2012of A-shares of listed companies which had promulgated and implemented equity incentive, in order to study the relevant factors of the equity incentive plan effect on the real earnings management, such as granting equity incentives shares (equity incentive intensity) and vesting conditions relative to the previous level of development of "strict" and "loose" degree. The same time, this paper divided the equity incentive plan into "incentive" and "welfare" two types based on the performance of equity incentive conditions and the past development level in order to study if the "incentive" equity incentive plans of the company’s earnings management degree is greater than "welfare" company equity incentive plan Through the empirical analysis, finally come to conclusions:The greater the equity incentive intensity, the greater the degree of real earnings management of listed companies; companies which promulgate "incentive" equity incentive plans have greater degree of real earnings management than those promulgate "welfare" equity incentive plans; The more difficult of the performance of the equity incentive conditions of the listed companies, the greater the degree of real earnings management the companies may conduct. And policy implications are put forward:To give full play to the role of the equity incentive system and limit the company’s management to carry on the real earnings management.On the one hand, the company needs to design the perfect performance appraisal index system, give play to the positive role of corporate governance structure; on the other hand, the government needs to strengthen the relevant accounting information disclosure requirements.