Explore The Surplus Of Senior Management Equity Incentive Policy Management

The true meaning of senior management equity incentive system was first started in1952,-Pfizer managers stock options and it was widely used in Europe and the United States since the mid-20th century. The practice has proved that this system is an effective incentive and restraint mechanisms. The equity incentive system let the owners and management to become a community of interests. It is one of an important way to solve the principal-agent problem. In our country the real development of the management equity incentive system is from the split share structure reform. Although in theory and practice the equity incentive system has a lot of improvement and development, compared with the developed countries, there is still a big gap.Seeing equity incentive system brings development at the same time, we also see it exposed many disadvantages and problems, especially the managers. Earnings management behavior has become increasingly prominent. It has damaged the interests of the related persons. Users of accounting information, such as the creditors, shareholders, securities regulatory authorities, as well as other stakeholders’more and more concern this problem. Therefore, research the earnings management is very necessary, as to the executives of listed companies of equity incentive system. In this paper I research the earnings management of listed companies in China from the point of view of the management equity incentive.The paper reviews the research status incentive stock options firstly. Using the principal-agent theory, incomplete contract theory, human capital theory and theory of motivation analysis of China’s listed companies’management equity incentive and earnings management behavior in the theoretical. And then describes the application and development of the equity incentive policy in our country, summed up the characteristics of incentive stock options, the implementation of conditions, the mode, the manage earnings reasons, means and method of measurement of earnings management. On this basis, the paper empirical researches the China’s listed companies in senior management equity incentive. Paper selected seventy-three listed companies implementing senior management equity incentive as the study sample, using the extended Jones model based on the industry classification of listed companies, the research shows that listed companies in the implementation of the management equity incentive earnings management. Finally, a summary of conclusions proposed future research prospects.