Small Board Of Listed Equity Incentive Situation And Its Effects On The Implementation

The separation of ownership and management rights in modern enterprise system leads to principal-agent problems, and intensifies the conflicts of interests between shareholders and managers, equity incentive consolidates their targets and interests by giving operators some firm’s shares. Practices in Western countries have proved that equity incentive plays an important role in reducing agency costs, improving governance structure, perfecting incentive and restrain mechanism, promoting corporate long-term value creation, attracting and retaining talents, and it is considered as an important way to effectively solve the principal-agent problem and a "golden handcuffs" to motivate executives.With the constant exploration of equity incentive and rapid rise of small and medium-sized enterprises in China, a large number of SMEs have joined the ranks of incentive stock options, which attracts wide attention and heated debate in academia and business community.So, how exactly implementing status of equity incentive in China’s SMEs? Can it promote value creation and performance enhancing for companies under the specific institutional background in our country? What effect exists between equity incentive level and company’s performance? Based on existing research results, this paper puts forward three hypotheses for the above problems, selects the listed companies in China’s SME board disclosed and implemented equity incentive plan during2009and2011as the research samples, then conducts empirical test respectively. In the study of the implementing status of equity incentive, empirical analysis method is mainly used to get qualitative conclusions; In the study on incentive effect, this paper uses independent samples T-test and paired samples T-test,besides, independent samples nonparametric test is used to examine the effects of the different incentive modes; In the study of law in effect between incentive level and corporate performance, multiple linear regression model analysis is mainly used to explore the correlation of equity incentive and firm performance.This research results show that although the small and medium-sized companies have high enthusiasm to implement equity incentive, their process is not good, many incentive plans have been terminated or canceled for various reasons, general problems are existing in the scheme’s design,such as the period of validity is too short, incentive intensity is not high, performance index of the excitation condition is too single,etc. The implementation of equity incentive for the ascension of the company’s performance has a certain positive effect; Incentive intensity and firm performance has a significantly positive correlation; Impacts of stock options and restricted stocks on firm performance difference is not obvious. Finally, according to the research conclusions, this paper proposes related some relevant suggestions and prospects.