GEM Financial Characteristics, Agency Costs And Equity Incentive Level

On October30,2009, Chinese GEM was officially opened. GEM is mainlyoffers financial channels for the companies that have innovative capacity and highgrowth, and for the companies that temporarily haven’t had ability to list onmotherboard and SME board. Companies that list on GEM compete fiercely, in orderto survive in the competition and retain talents, a lot of companies begin to chooseequity incentive structure.This paper bases on GEM, analyze its influence to equity incentive level fromthe impact of financial characteristics, agency costs difference between GEM andmotherboard and SME board. And put forward relevant suggestions by combiningactual situation of GEM. This paper uses normative analysis and empirical analysiscombination, quantitative analysis and qualitative analysis combination methods.This paper takes the listed company that base on the data of Shanghai and Shenzhenmotherboard, SME board and GEM from the beginning of2010to the end of June2013, to put forward equity incentive plan and implement as study samples, useSPSS17.0statistical software to analyze company’s financial characteristics, agencycosts influences to equity incentive level, as well as financial characteristics andagency costs combination influence to the equity incentive level. And analyze theequity incentive situation difference between GEM and motherboard, SME board.Firstly, summarize literatures of equity incentive and introduce some concepts.Secondly, analyze the present situation of GEM equity incentive from differentindustries, regions, etc.Again, combine the differences between GEM and motherboard, SME board’ sfinancial characteristics, as well as differences between GEM and agency costs, putforward their influences to equity incentive level assumption. Use SPSS statisticalsoftware to conduct regression analysis, finally get results of relevant regressionanalysis, and conduct comparative analysis.Finally, base on empirical analysis results, put forward some proposals such asGEM companies should use a variety of equity incentive modes, maintainreasonable ownership concentration, improve assessment indicators for company ’sfinancial condition aspect, improve company’s governance structure.