Equity Incentive Object Setting And Its Influencing Factors

Equity incentive is a kind of corporate governance mechanism widely used in western countries in the seventy or eighty's of last century. This mechanism has played a good effect in motivating and retaining talents. The use of this long-term mechanism in China is late. Since the mechanism is used in China, a large number of domestic scholars do research on the theme of equity incentive. At the end of 2005, the Commission issued the "listing Corporation equity incentive management measures(Trial)", which means that the equity incentive in China started to enter the track. So far, China has been using the mechanism for ten years. In the process of using the mechanism, the enterprises have achieved results and learned a lot of lessons. For the current study, most of the domestic scholars focus on the condition, grant number and exercise price of the equity incentive. There are few domestic scholars pay attention to the object setting of equity incentive. So I take the equity incentive object as the research subject and analyze the setting and the influencing factors of the objects in this mechanism. The data of this paper come from the Tai'an's CSMAR database. The paper use the data of China's A shares in Shanghai and Shenzhen of listing Corporation for the first time of the draft equity incentive from January 1, 2006 to December 31, 2014 as a sample. The distribution of the equity incentive object is measured by the share of the senior management and the core technical staff. Since very few enterprises take the stock appreciation rights as the equity incentive model, so this study did not consider the distribution of incentive objects in this model.In this paper, I use the theoretical analysis and empirical analysis to do the research. Before the empirical analysis, this paper makes a simple statistical analysis on the background of the nine years of equity incentive objects. From the results we know that the company's share of senior executives is very high in the early years. But over time, the dominant position of the senior management has gradually been replaced. The core technical staff occupy most of the grant share. In the number of grants, the core technical staff showing a growth trend, this means the range of the incentive is expanding. What's more, The ratio of the total grant shares and the total number of shares maintain a stable state for nine years. I think this is for the purpose of protecting the right of the corporate control.After the simple statistical analysis on the background, this paper reviews the related literature, and then puts forward a series of hypotheses. At the end of the sample selection, this paper makes a descriptive statistics. From the result we learned there are 306 companies use restricted ballot and 360 companies use stock options as an equity incentive model. Only 13 companies use the stock appreciation rights as the model of equity incentive. From the results of the analysis of the share of the core technical staff, we know whether stock options or restricted stock, the vast majority of enterprises gave the main incentive share to the core technical staff, very few enterprises awarded the share to executives, which indicates that the core technical is getting more attention now.In addition to descriptive statistics, the correlation analysis and regression analysis are used in this paper. The results showed that in terms of firm characteristics, the nature of enterprises in industries and the profit situation will affect the setting of equity incentive objects. So if a company belongs to the industry of new and high technology and has a good profit, the core technical staff can get more share. What`s more, in terms of the characteristics of the company, The company's growth has great effect on the setting of equity incentive objects. That is to say, the stronger the growth of the enterprise, the less incentive share to the core technical staff. In terms of governance characteristics, the two job unity and the independence of the board of directors have great influence on the incentive objects. The Statistical analysis results show that under the influence of these two factors, the core technical staff can get more incentive share. In addition, the significant positive correlation between property rights and incentive objects shows that state-owned enterprises are more willing to take the core technical staff as the main object of incentive. In order to understand the influencing factors of the incentive target setting in different industries, this paper put the two categories of high-tech and non-high-tech enterprises into the regression test. The results show that the high and new technology industries are mainly affected by the size and profitability of the company, and it is mainly affected by the two roles and the board of directors in the corporate governance. The non-high-tech industry is mainly affected by the company's characteristics, and the influence of the factors on the governance characteristics is not significant.At the end of the paper, the relevant conclusions are summarized. According to the current situation of the equity incentive plan in our country, some relevant suggestions and countermeasures are put forward from the improvement of the internal governance of the enterprise and the improvement of the external objective environment.