Research On Shareholder’s Wealth Effect Of Employee Stock Option Plan In Listed Companies

Since 1950s,Louis Kelso first proposed the concept of employee stock ownership plan,the employee stock ownership plan has been continuously improved and developed and widely used in many countries around the world.As a form of equity incentive,employee stock ownership plan is a quite common one kind of system design in mature markets,promoting the development of employee stock ownership plan work and making the employee and shareholder interests consistent,will help to improve the profitability of listed companies,enhance the production efficiency,and improve the comprehensive strength of the company.The implementation of China’s employee stock ownership plan(ESOP)is late,before 2014,although the internal staff ownership,especially executives ownership is not unusual in listed companies,but due to the of the special political and economic environment and the complexity of employee stock ownership plan(ESOP),the development of employee stock ownership in China is slow.In June 2014,the CSRC issued "the pilot guidance of the listed companies implementing ESOP"(hereinafter referred to as "guidance"),it means that the employee stock ownership plan firstly had the formal specification.The release frequency of the employee stock ownership plan continues to accelerate,the release quantity had a significant increase,so ESOP had become the new path of the long-term incentives for employees,and the reform of state-owned equity for domestic Listed Companies.With ESOP company gradually increased,the academic study of ESOP is unceasingly thorough,scholars mostly started from the employee stock ownership plan selection and related theory introduction to research the change of the company’s financial indicators and the change of the performance,attention is mainly company in the change of the performance after the implementation of the employee stock ownership plan,but about the change of shareholder wealth and the effects of the ESOP on shareholder wealth is almost no.This dissertation takes the ESOP Company as sample to explore the reasons and results of the implementation of the employee stock ownership plan.Firstly,this paper reviews the research status at China and abroad,secondly summarized and analyzed the theory about correlation of ESOP and the shareholders wealth effect,the theory includes principal agent theory,incentive theory etc,and empirical study the assumptions for verifying the correlation between variables.Through theoretical and empirical analysis,obtain the conclusions as follows:(1)the listed company declared ESOP will increase the short-term wealth effect of shareholders;(2)relative to purchase ESOP share for employees by the company net profit extraction fund,the announcement effect for employee self-financing way is better;(3)The source of stock is fixed gain obtained and the announcement effect best,the secondary market is the second,the gratuitous gift by controlling shareholder is the worst.According to these conclusions,this paper presents relevant suggestions,the listed companies should actively promote the employee stock ownership plan,encourage employee to purchase ESOP share by self-financing way,encourage the issuance of new ESOP shares by the way of directional issuance,and strengthen supervision the ESOP listed companyThis dissertation is divided into five parts.The first part is the introduction,which puts forward the research background,research ideas and the framework of this paper.The second part is the literature review at China and abroad,analyzes the various motives of the company to implement the employee stock ownership plan,summarized the different research results for the company’s wealth effect and the corporate performance by ESOP.The third part is the theory summary of listed companies implement the employee stock ownership plan,explains the concept and types of employee stock ownership,summed up the implementation of the listed company’s employee stock ownership,expounds the issuance and management of employee stock ownership,and expound the agency theory,incentive theory and human capital theory etc.The fourth part is the empirical research on the shareholder wealth effect by the implementation of ESOP,theoretically analyzed how to affect the shareholders’ wealth of ESOP from stock sources,funds sources and different ownership of companies,and puts forward four hypotheses:Hypothesis 1,the listing company announced ESOP will increase the short-term wealth effect of shareholders;hypothesis 2,compared with purchasing shares for employees the net profit of the company,the announcement effect for purchasing ESOP share by self-financing way is better;hypothesis 3,The source of stock is fixed gain obtained and the announcement effect best,the secondary market is the second,the gratuitous gift by controlling shareholder is the worst.Also empirically test the correlation of ESOP and the shareholders wealth effect.Taking the ESOP listed companies as the study sample,using descriptive statistics,regression analysis etc.,to test the proposed hypotheses,in this paper.The fifth part is the conclusions and policy recommendations,summarized the research conclusions of this paper,put forward some relevant suggestions for improvement,and pointed out the shortcomings and deficiencies in the research.