Research On Effect Path Departure Of Equity Incentive Plan And System Improvement

2015 is a key year to deepen the mixing reform of State enterprises. Equity incentive plan is once again into the public eye. Over the years, the domestic and foreign researches on equity incentive plan have not been stopped. But academic research results are so inconsistent that equity incentive plan's effect is inconclusive.Through observing the recent situation of top manager's equity holdings and the lift condition of restricted shares in listed companies, find that top executives generally lifted a large number of stakes in ban period, which indicating that the equity incentive plan's long-term effectiveness is questionable. In addition, the ‘2014 Market Management Annual Report' shows that, listed companies' market value will increase if more stakes are lifted.That means there is a strong association between market value of listed companies and restricted shares which are lifted by executives. And a realistic action mechanism of equity incentive plan may be possible.Therefore, combining theory, academic results and reality, there may be absence of equity incentive plan's long-term effectiveness, and one possible reason to explain this phenomenon may be a realistic path that is different from traditional equity incentivethe plan's action path,including market value management which is closely related to market value.To study equity incentive plan's long-term effectiveness of listed companies and a possible realistic action path, empirical analysis methods are used in this research, based on annual reports of listed companies.There are 3 empirical steps of hypotheses test. And the following is the research results:1) equity incentive plan's long-term utility is not significant;2) equity incentive plan can significantly affect value management behaviors'(acquisition specifically) implementation;3) value management behavior has a significant positive impact on enterprise price performance.Finally, the conclusion is that there dose have a lack of long-term utilty of equity incentive plan based on the empirical findings, and one of the reason which may lead to this long-lasting failure is that equity incentive plan has a realistic action path which can not promote enterprise performance. In addition, aiming at the research findings and currentsituation of executive stock ownership, some suggestion are made in the end of research from the perspective of listed companies to design and implement the equity incentive plan.