Study On The Equity Incentive Effect Of Listed Company’s Share Price

Equity incentive is an important incentive pattern in the modern enterprise management system.It is widely used in the listed companies in many countries around the world at present. According to the theory of western economics, equity incentive bundled in the interests of the shareholders and management effectively,can not only solve the principal-agent cost in corporate governance,but also can improve and enhance the level of the company’s performance, and can cause positive influence on the stock prices of listed companies.As a kind of important information,equity incentive can impact on the stock price, the announcement of its plan can cause high attention of investors on the secondary market, investors believe that after the implementation of equity incentive of listed companies the company’s market competitiveness will be enhanced, business performance and market share will be improved, etc., so that the company’s fundamentals change, thus the stock prices will be promoted. Otherwise, the highly sensitivity and adequate liquidity of the stock price tend to reflect on the performance of the company’s share price in advance. Such a logic based on equity incentive, will contain the short-term trading of investment opportunities, especially after the announcement of the plan, the stock price fluctuation amplitude was significantly higher than before the announcement of equity incentive plan. Listed Corporation equity incentive plan announcement is often considered to have excess return ratios, it is full understanding and mining by investors. It is often seen that the price of the listed company for the release of the equity incentive plan on the secondary market. But not all equity incentive plan released after the listed Corporation’s share price has more than before the release can be positive earnings. Differently, equity incentive plan for listed Corporation released equity incentive plan when the market environment is different, the different effect of incentive expectations, the company growth expectations and lead to distinct different stock price performance. Some listed Corporation equity incentive plans satisfied investors, stock prices continued to rise; there are also some less than the market expected, the stock price continued to decline. Is mainly due to the reaction of stock price difference caused by the equity incentive is not the same as.Therefore on the secondary market, there exist an investment opportunity of the equity incentive plan announcement. The equity incentive plan contains strong growth performance of the company’s stock price in the announcement is expected to bring future opportunities beyond the market average returns in the short term; and in the medium and long term incentive plan in the equity, the actual performance improvement can be extended interval and amplitude of stock prices.