On The Incentive Effects Of Employee Stock Ownership

Academia has long argued over one of the important items that company performance would be affected by ESOP (Employee stock ownership). One point increasingly acknowledged by more and more scholars means that the ESOP system, over a period of time, contributes to the company performance, motivating employees as an effective method. Besides, the system stands solving the principal-agent problem. In recent years, public companies adopting the system emerge more. This article exists precisely under the above assumption.The context, selecting31listed companies implementing ESOP plan in Shanghai and Shenzhen stock markets as samples, and using the public indicators in their annual financial reports, probes into how exactly the ESOP plan influences company performance by means of disperse analysis method. In addition, this article estimates the effectiveness of the ESOP plan with Simple linear regression model. The results shows that these companies benefit from this plan, thus illustrating the ESOP system can help reduce executives’moral risks, motivate employees’enthusiasm, and finally improve company performance. Accordingly, the context offers some suggestions of perfecting the ESOP system. In this paper.The contents have certain academic significance to the research of investigating the efficiency of the human-capital management by scientific analysis method, and also have practical significance to improving the efficiency of human-capital management.