Empirical Research On Correlation Of Management Equity Incentive And Corporate Performance Of The Listed Companies In SME Board

This paper focuses on the effect of equity incentive on the companies listed on SME board since2006, and demonstrates whether the equity incentive system for the management has been effective, which thus played a role in promoting corporate performance.On the basis of previous studies, article focuses on the concepts, basic theory, equity incentives in the form of incentive stock options and other issues firstly and then it will describe the equity incentive system in our country’s development, through descriptive analysis of the characteristics and status quo of China’s SME board listed company equity incentives. Then it also make use of principal component analysis, regression analysis and other studies on the relationship between the SME board listed companies are demonstrated as well as the effect of incentives between the performance of the company. And the results show that proportion of equity incentive has positive correlation with corporate performance. The companies which implement equity incentive do better in profit than the company who do not. In the end, at the conclusion of the study, recommendations are given based on our current equity incentive policy.