Study Of The Relationship Between Equity Incentive And Economic Performance Of Listed Companies

This paper mainly focuses on the study of how the theories about human resource management, organizational behavior, financial management science and economics effect on the patterns of behavior about the shareholders rewarded by stock right, it’s somewhat complementaty to the theoretical basis of equity incentive plan putting forward6basic hypothese according to the current market in china with various theory models.:1. Corporate performance is directly proportional to the occupancy of the stock right of the shareholders by equity incentive plan in quoted companies.2. Corporate progression is directly proportional to the occupancy of the stock right of the shareholders by equity incentive plan.3. Corporate performance is directly proportional to the turnover of its total gross assets.4. corporate performance is directly proportional to its own scale.5. Corporate performance is inversely proportional to the occupancy of the stock right by its top-ten shareholders.6. Corporate performance is proportional to its debt asset ratio.Taking the97valid quoted companies who firstly started equity incentive plan issuing A-shares in2011as samples. And setting ROE(Rate of Return on Common Stockholders’ Equity) as variable while the occupancy by equity incentive as independent variable, in addition, using "Corporate scale","Total Assets Turnover","Debt Asset Ratio","Ownership Concentration","Increase Rate of Main Business Revenue" as control variable, and mixing all above into data analysis testing the correlation between variable and dependent variable with the econometric models through multiple regression analyses, a conclusion comes out that corporate performance is not linearly dependent with equity incentive showing that equity incentive plan is somewhat effective.This paper explores the conclusion above by deep analysis pointing out reasons for that. Lastly, this paper offers several suggestions below to both governments and corporations Governments should improve legal systems working out more practic policies for the changing capital markets. while corporations should set up more realistic equity incentive plans with realistic rational KPI through efficient management systems, standard performance review system and professional manager system.