Equity Incentive And Corporate Performance Correlation Studies

Equity incentive is put forward to solve principle-agent contradictions between owners and operators under the framework of modern enterprise system. Equity incentive awards a certain amount of equity incentive subject matter to managers to realize the goal of convergence of interests among operators and owners. With the development of the equity incentive theory and the advancement of practice, whether the equity incentive can improve enterprise performance effectively has become the focus of the field of theory and practice. According to currently research results of some relevant experts and scholars, there is still no concrete conclusion about the influence of the equity incentive on business performance. However, big differences still exist among those studying results about the effect of equity incentive mechanism. Therefore further exploring the relationship between equity incentive and corporate performance is of great significance for perfecting the equity incentive theory and guiding the equity incentive practice.First of all, this paper introduces the research background and significance, systematically elaborating related research achievements of experts and scholars on the equity incentive and their views. Secondly, it discusses the development and theoretical basis of the equity incentive theory and practice, describing the present situation of the equity incentive and the enterprise performance evaluation in our country. Thirdly, this thesis uses the empirical research method to explore the relationship between the equity incentive and corporate performance so that people can have some solutions and advice to perfect the equity incentive to implement the environment. Finally, people can make some conclusions and then make an outlook for the future study.In the process of empirical research, this thesis takes the equity incentive implementation elements as the breakthrough point, mainly demonstrating the proportion of incentive, incentive value, incentive validity, as well as the relevance of executive pay and performance indicators. At the same time, it studies the symbolic enterprise profit ability, debt paying ability, and development capacity index, using descriptive statistics, correlation analysis and multiple regression analysis to study the relationship between equity incentive factors and the index of corporate performance. In this paper, empirical research results show that: the proportion of equity incentive is negatively related to the enterprise performance; it’s positively related to the value of equity incentive and corporate performance; the validity of equity incentive is positively related to corporate performance. What’s more, high salary management has a positive relationship with corporate performance, too. The research conclusion is coincident with the mainstream view of equity incentive. The author hopes that this conclusion can provide beneficial supplement for the perfection of equity incentive theory and the advancement of its practice.