A Study Of Large Shareholders’ Control Rights、Managerial Equity Incentive And Underinvestment

As one of the most important means of resource allocation of the companies, investment decisions directly affect the enterprises’ business performance and profitability, and affect the enterprises’ value maximization ultimately. In recent years, China’s securities market has developed rapidly, but there have been many worrying excessive or insufficient investment. Some scholars’ studies show that : Compared with overinvestment, underinvestment of Chinese listed companies is more common. Underinvestment has become one of the main factors that influence the healthy growth of listed companies in our country. Therefore, how to effectively restrict the underinvestment behavior of the listed company’s senior management has become a problem that needs to solve.Equities incentive for senior executives is an incentive system designed by the companies’ owners to reduce the agency cost on the basis of the goal of this system, the interests of the motivated person will be converged with the interests of the whole company. What is the fact, the theoretical and practical circles has not yet do some research deeply, this article intends to try in this aspect. So to explore whether executive equities incentive can effectively inhibit underinvestment or not is the first core issue needed to be solved in this paper.In addition, "a dominant" is the basic feature of the listed companies in our country. Theoretically, concentrated ownership structure can strengthen the supervision of the owners to management so that they can obtain the corresponding percentage of capital gains and dividends; but on the other hand, the shareholders with large share can violate the interests of shareholders with smaller share by use the control in their hand, in this case the value of the company must be affected. So, large shareholders’ control as a widely used means of supervision of listed companies can effectively restrain the self-interest behavior or become a way of violation of the listed company is the second key problem needed to be solved in this paper.On this basis, this article chooses the date of China’s A-share listed companies from 2009 to 2014 as research samples, and examines the mechanism of action of how executive equities’ incentive effect underinvestment, and to further explore the large shareholder control in a relationship between the adjustment. The results show that: firstly, there is the problem of investment efficiency of listed companies in our country, and overinvestment phenomenon is more serious than underinvestment, but underinvestment phenomenon is more common than overinvestment; secondly, the equities’ incentive of listed companies in China is as effective as expected to alleviate the underinvestment problem; thirdly, the large shareholders’ control has certain supervisory function to solve the enterprise investment shortage problem; fourth, after considering the nature of corporate equity, compared with state owned enterprises, the effect of the executive equities’ incentive of non-state owned enterprises is more useful, large shareholders control to supervise the management’s role is less obvious;after considering the market oriented process, there is not much difference of the effect of the executive equities’ incentive in high market oriented process and in low market oriented process,the effect of large shareholders control is more obvioue in high market oriented process.