Executive Equity Incentive Impact On Stock Dividend

The effectiveness of the implementation of executive equity incentive in China is controversial, executives through a variety of methods, in the "legal" coat of stock option to earn non-efforts rewards, and the distribution maybe is one of the methods. The stock option is the most important and common incentive model, incentive income depends on its exercise price and the stock market price, cut down the exercise price and raise the stock price, that is, "buy low and sell high" is the key to realize incentive income. The stock dividend distribution, on the one hand, under our background of stock option dividend protection type,exercise price corresponding downward adjustment as the ex dividend; on the other hand, the high dividend or share behavior will be subject to market investors, stock prices soared in fill right effect. Because the stock dividend can become a booster of "buy low and sell high" to the stock option, it is likely to be in favor of the company which implements equity incentive. In the companies of equity incentive implementation, executives are likely to make good on the dividend distribution policy, namely the implementation of executive equity incentive impact on the dividend allocation.This paper uses stock dividend distribution as the breakthrough point, studies that executive equity incentive effect on corporate behavior, according to the related theory and the special system background of our country’s capital market, puts forward the hypothesis that executive equity incentive effects on stock dividend, then further analyzes that this effect may exist differences in the state-owned enterprises and non state-owned enterprises. The stock option incentive plans of the a shares listed companies during 2009-2013 are research sample, using logit regression and multiple linear regression method, empirical tests that executive equity incentive impact on the corporation’s stock dividend distribution tendency and distribution level. The study found that:(1) Compared with companies which did not implemented equity incentive, the companies implemented equity incentive prefer stock dividend distribution and the distribution of higher level. (2) In the companies implemented equity incentive, the executive incentive intensity is bigger, the possibility of stock dividend distribution is greater, and stock dividend distribution level is higher. (3)Compared with the state-owned enterprises, in non-state-owned enterprises, the executive incentive intensity is bigger, the possibility of stock dividend distribution is greater, and stock dividend distribution level is higher. According to the research conclusion, this paper proposes some suggestions:give full play to the supervisory role of the board of supervisors, improve relevant laws and regulations, guide rational investment of investors, and further standardize the behavior of non state owned enterprises.