Research On Performance Of The Choice Of Equity Incentive Object To Listing Corporation

After entering the twenty-first Century, the company realizes that in the final analysis the market competition is the competition of talents along with the increasingly fierce market competition. It has become the key to a company’s management that how to create an effective incentive mechanism to attract and retain employees and how to motivate employees to create value for the company. Especially the listed company needs to properly handle the existing principal-agent problems between shareholders and managers, so that they can promote the development of the company. The equity incentive mechanism is exactly an effective way to solve the agency problem, which though granting equity to managers, makes managers share the surplus value and closely combines personal interests of the managers with the interests of the company to encourage their diligence for the company long-term development service.At the end of last century, it had implemented equity incentive plan in the company and the equity incentive system developed so slowly due to the lack of institutional norms. By a series of laws and regulations related to equity incentive system being introduced, the market environment is becoming more and more mature that much more companies begin to implement equity incentive plan. While at the same time, there are some listed companies choose to terminate existing equity incentive plan, and turn to carry out the employee stock ownership plan, or launch another incentive system. The most important reason that terminates existing equity incentive scheme is that the incentive effect can not reach the expected value. There are so many reasons that lead to the poor incentive effect. The author believes that the choice of the object of equity incentive is an important factor. Incentive objects play a naturally different role of the company’s operations because of the difference in the company’s strategic position and power, for example top management has a strategic decision-making, while the core staff is the company strategic backbones in smooth implementation. The company should be targeted to select the appropriate grant object in order to achieve optimal effect on equity incentive scheme.This thesis takes 80 companies among A shares listed companies in Shanghai and Shenzhen in 2013 as the sample to study the influence of the choice of the equity incentive object on the performance of the listed company. Because the choice of the incentive object is an abstract noun, the paper quantifies that and use the proportion of managers gained the equity share in total equity share to show the center of gravity for the selection of incentive objects. The thesis puts forward the hypothesis, constructs the model, and use the regression analysis to verify the relevant assumptions based on the study of relevant literature review, related concepts and theoretical basis, and at last draw the following conclusions:(1) incentive object selection can affect the performance of the company. Compared to the core staff, the performance of the company tends to be better when the center of the incentive object is inclined to the top management; (2) it finds that industry characteristics, nature of equity, incentive mode can impact on the relationship between incentive targets choice and corporate performance after a regression analysis of sample grouping. The listed companies should select appropriate incentive object according to considering the company’s own situation under the design of equity incentive programs in order to maximize the effectiveness of incentive. The research results of this paper will be provide some references for the practice of equity incentive of listed company.