The Research On The Relationship Between Executive Equity Incentive And Performance Of Listed Companies

In modern enterprise, Separation of ownership and management causedprincipal-agent problem, such as asymmetric information, moral hazard, adverseselection and other. Incentive systems conducive to resolving the issue, stimulate thegeneration of equity incentive. Equity incentive by giving managers some certainincentive stocks, let them become shareholders, then managers can share thecompany’s residual income and risk. Equity incentive contact the company’s interests,the interests of executives with those of shareholders interests together, Promptingmanagers to improve operational efficiency, drive to improve company performance,mitigate principal-agent problem.In other countries, equity incentive has been60years of history, most scholarsbelieve that the implementation of equity incentive can significantly improve theperformance of listed companies. In China, since December2005," Equity IncentiveManagement of Listed Companies (Trial)" issued, equity incentive system has beenrapid development, however, Foreign and China’s listed companies face differentmarket environment, and there are differences between the company’s own conditions,Whether equity incentive can improve performance of listed companies in China, it isworth further study.In this paper, Contact China’s national conditions, A empirical study of therelationship between the equity incentive and performance of listed companies. Thefollowing text is divided into five chapters: the first chapter, Introduces thebackground and significance of the study, a review of the relevant research results athome and abroad, Clarifies the research ideas, contents, research methods andinnovation. The second chapter defines the concept of executive equity incentive,introduced the principal-agent theory, human capital theory, management incentive theory, As well as the principle of equity incentive effect on company performance，Laid a theoretical foundation for the implementation of equity incentive. The thirdchapter reviews the equity incentives in China’s historical evolution andimplementation, pointing out the main problems existing in the process of theimplementation of equity incentive. Chapter IV is the empirical part. Select154listedcompanies who had implemented executive equity incentive from year2007to2011as samples. By horizontal and vertical performance comparison through the samplecompanies and paired Company, and use multiple regression analysis, to analysis therelationship between the equity incentive and corporate performance，Meanwhile,studied the effect of different industries equity incentive. The fifth chapter is theconclusion, and pointing out the shortcomings of the paper, then give somesuggestions to the question of how to play the role of equity incentive.The main conclusions of this paper are as follows:(1) There was a significantpositive correlation between the level of equity incentive and performance of listedcompanies, That the proportion of equity incentive higher and better businessperformance.(2) In different industries, the proportion of equity incentive extentaffected the results are not significantly different.(3) At the present stage, There aremany problems of equity incentive, for instance, the scope is small, a relatively lowproportion of incentive, related system is not perfect, and so. Cause equity incentivefor performance improvement to a lesser extent, its effectiveness needs to beimproved.