The Influence Of Equity Incentive Of China Growth Enterprises Market

Equity incentive was born in the United States in the 1950 s. The executive compensation has growth rapid and the enterprise has developed rapid, due to the incentive mode of employee stock ownership plan and stock option. The equity incentive has become a popular management mechanisms in Britain, France, Australia, Italy, Japan, Singapore and other countries. China has not introduce the equity incentive until Shenzhen Vanke company first lanch the manager stock option incentive in 1933. After multiple consolidation and improvement, equity incentive has become one of the most common incentive mechanisms in China's capital market.China Growth Enterprises Market opened in Shenzhen Stock Exchange on October 30, 2009. Today, the gem market value has amounted to 3.58 trillion yuan, become an important part of capital market. The implementation of equity incentive was 190 among 429 listed company on the GEM till March 30 th,2015. This paper focuses on studying the equity incentive effect of gem listed companies.First,this paper introduces the concept,mode and implementation of equity incentive, studied the theory, such as the principal-agent theory, then introduced the domestic and foreign theory: some said it has positive relationship, others said it has negative relationship, and the rest said it has no relationship. After that, this paper reviewed the development of equity incentive in China, and describes the equity incentive implementation status quo of the gem enterprises. Finally, it do empirical analysis about the short term and long term effect of equity incentive on GEM companies.The empirical analysis has two parts: the influence of short_term stock price and long term financial indicators. The result show it has significant influence on short term stock price and has no improvement to long term financial data.At the end, the paper summarized the innovation and deficiencies, and discussed the further research.