Influence Of Major Shareholders Control To Equity Incentive Effect

Separation of ownership and management inevitably lead to the enterprises Principal-agent problem. As a tool of moderating conflicts between shareholders and management, equity incentive is gradually adopted by Chinese Listed Companies from2006.Scholars’research findings are inconsistent in China. The reason is that compared to Western countries, the ownership is concentrated in the Listed companies of China. Major shareholders always have exclusive status. Major shareholder control may influence the equity incentive effect. Major shareholder’s dominance may use to strengthen the supervision of the management to enhance the corporate performance. On the other hand, excessive control could lead to "tunneling", it will lead to performance decrease.This paper selects the perspective of the major shareholder control, the sample of listed companies which have implementation of equity incentive from2009to2013to research the impact on the equity incentive effect of major shareholders control. In order to distinguish the different company ownership, the sample was divided into state-owned enterprises (SOEs) and private enterprises in research. The empirical results show:(1)When excluding the impact of major shareholders control, equity incentive is negatively related with corporate performance.(2) When considering the impact of major shareholders control, effect of major shareholders control is significant. This effect mainly is the supervision of major shareholders, equity incentive effect is significant.(3)The effect of major shareholders control over different types of enterprises is not same, major shareholders’supervision of SOEs is weaker than private enterprises.