Countermeasure And Test Result Of The Equity Incentive In Fund Companies

Fund industry as a talent-intensive industry, human capital plays a pivotal role inthe development of the company. But in recent years, the public fund begins a seriousbrain drain, frequent turnover of the industry researcher and fund managers and otherkey personnel of the company raised funds has restricted company’s development.The reason involves two core issues: First, the lack of effective incentive mechanism.Second, the right to speak for the company management is not high, the sense ofbelonging is not strong. Faced with this situation, take equity incentive approach canstimulate the enthusiasm of the fund practitioners to reduce the brain drain.June1,2013, implementation of the "Securities Investment Fund Law",vigorously promote the company’s equity incentive. March10,2014, China SecuritiesInvestment Fund Industry Association has issued a "further improve the corporategovernance issues related to fund management advice." These provisions provideguidance to the public fund equity incentive and shareholding restructuring.Based on the current market equity fund incentive effects were tested,implemented incentive equity firm can achieve the desired results after the positiveconclusion, analyzes the path of the fund company’s equity incentive and cautionscame to the conclusion in conclusion.This paper is divided into five parts, the first part is an introduction, includingthe expansion of significance of the topic, research and innovation of this paper. Thissection describes the status quo of China’s information management industry, ourincentive fund formation and implementation of equity incentive practicalsignificance.The second part is the theoretical basis and literature review. This chapterintroduces the incentive and equity-related principal-agent theory and incentive theory. Company equity incentive can effectively solve the moral hazard between principaland agent as a result of separation of management and ownership and resultingadverse selection. Enables corporate managers from the perspective of the owner, toavoid damage to the company’s short-sighted thinking interests for the company tomake long-term sustainable development planning. Incentive theory is the maincontent of behavioral science research. Describes the contents of each type ofincentive theory, the process of transformation of incentive theory and behavioraltheory. Each part has a different theory focused research points. This section alsointroduces the concepts, methods and factors associated with equity incentives. Equityincentive more than10kinds of ways, the most common is the stock options, which iswidely applied to the Chinese equity incentive approach, which applies equally toChinese fund management companies. This article has subsequently been combingthe relevant literature, the extent of the company’s performance and equity incentiverelated. When the incentive is too small to reach the degree of equity incentive effect,the equity incentive and the extent of the company’s performance was negativelycorrelated； when the extent of equity incentives to the extent appropriate, to achievethe effect of interest bundled managers, along with the company’s performance will bethe extent of the equity incentive the increase rises； when the degree of equityincentive up to a certain critical value, will show a negative correlation with theperformance of the company’s results. The degree of equity incentive is kept within acertain range, will be on the company’s performance has improved.The third part is the empirical testing, this paper uses the average yield, Sharpeindex and Alpha index to measure the Company’s performance, select2009-201491fund management company’s quarterly data as samples for return. Concluded that theimplementation of equity incentive fund has a positive impact on fund performance.The fourth part of equity fund management company Incentive Measures. By thethird part of the conclusion, then you can discuss the analysis for the fund company’sequity incentive plan. Fund companies can transfer the original shareholders, theintroduction of strategic investors and companies directed replenishment and otherways to get shares of the company, after the adoption of the employee stock ownership or establish a limited partnership, etc. so that the resulting incentive sharesto employees. And put forward some problems in practice specific operations thatneed attention.The fifth part is the conclusion. The current market is the most suitable way tofund the implementation of equity incentive is through a private placement to alimited partnership company employees initiated the establishment. If the fundcompany wants a broader financing channels, through the transfer of shares listed onthe national system, to continue to address the company pricing, financing and otherissues by letter through the market.