A Study Of Equity Incentive And The Earning Management Take Vanke Co.Ltd. As An Example

With the development of securities market, the stockholders, creditors, stock supervision departments and other stakeholders pay more and more attention to the earning management in listed companies. The various stakeholder pay special attention to the earnings management in the implementation of equity incentive of listed companies.Firstly, We recall the relevant research literature at home and abroad, basis on of this sum up the theoretical foundation of managers’ stimulation and earnings management, then embarks from managers’ stimulation, to make the theoretical analysis and the demonstration studies about the real estate industry. The goal is to deepen the understanding of earnings management theory, to provide some suggestions for the formulation of managers’reward contract and the design of managers’stimulation mechanism about the real estate industry, finally to restrain earnings management of our listed firms. Secondly, the paper reviews two equity incentive plan of Vanke Co. Ltd. from2006to2012.And we analyze the equity incentive plan and we carried out tendency of earnings management. Then, we analyze financial data of Vanke Co. Ltd. in the aspects of the trading point of recognition, accruals management, earnings, profits and dividend distribution.From the point of view of these data can be drawn from the existence of earnings managementThirdly, this article use quarterly data which from2002to2012of Vanke Co. Ltd. for the study sample. The paper use the statistical software to study earnings management of sample empirical. The results showed that:the degree of equity incentive was a significant positive correlation with earnings management in Vanke Co., Ltd. Then we draw equity incentive induced earnings management behavior. Finally, analyze the adverse effects of earnings management for the enterprise.Based on the above findings, combined with the actual situation of China Vanke, this paper presents the defects of equity incentive plan, and put forward views of the plan of improving out equity incentive.