The Impact Of Executives Of Listed Companies And Major Shareholders On The Financial Performance Of The Company

Since the completion of the equity division reform, the executives and the major shareholders began to reduce the shares of the company frequently. And that have a great influence on the Chinese A stock market. This article selected some listed companies as the research samples which occurred shares lessening from them in 2012 A-share market. Using theoretical and practical ways, we examined the impact on the company’s financial performance from shares lessening. First of all, we get the financial performance drawing support from principal component analysis which treated as the explanatory variables in the regression model for the empirical analysis. We find that there is a negative correlation between the proportion of shares lessening and financial performance, that means the more shares lessening, the worse financial performance. After grouping these samples, the regression shows that as to the GEM and SME, the samples from main board stock market which occurred shares lessening have the greatest impact on financial performance. And we put it another thought again, grouping this samples as non-manufacturing and manufacturing, we find that as to the manufacturing, the non-manufacturing’s financial performance is vulnerable to the negative impact from shares lessening. Then we analysis the financial situation during three years using paired-samples T-test, and we find that the financial performance indicators are dropping except the absorb cash ability owing to the premise of shares lessening, and the financial risks continue to rise until the second year. Finally, according to the results of empirical analysis, we put forward to strengthen financial management, improve equity incentive system and establish scientific the equity structure and so on.