The Study Of Equity Incentive Effect And Its Influential Factors Based On Chinese Listed Companies

Under the economic globalization,the modern enterprise system is developed constantly.Business environment is more and more complex.Shareholders tend to hire Professional Managers on behalf of themselves.With the company's separation of ownership and management rights,agency relationship is formed.Shareholders in order to reduce the short-term behavior of the operators to make them think about the long-term interests of enterprises.Equity incentives should be introduced.The purpose of the introduction of equity incentives is to create the same goals between owners and managers.Once they form a common goal,the principal-agent problem can be solved partly.In the 1950s,the equity incentive is created in the United States.Equity incentive played a key role during the development of Silicon Valley.At the same time,equity incentive has been developed widely.In the early days,many companies want to retain talent,but lake of funds.In this case,equity incentive helps them solve the problem.The more professional manager market matured the more equity incentive effect.After the reform and opening up,China's economic developed rapidly,the principal-agency problem becoming more and more serious.The equity incentive attracts attention from theory world and occupation world.It's in the 1990s that China listed companies began to introduce equity incentive theory.So far,there are many researches about equity incentive.But no conclusion has been made in the theory world about the relationship between equity incentive and achievement of listed companies.In recent years,the listed companies began to use equity incentive as a long-term incentive.At the end of 2005,China "split-share structure reform" was begin,by now there has been a great advance on China capital market.After 2006,many documents about equity incentive were released,which is the legal basis of the implementation of equity incentive,the environment of equity incentive has been significantly improved.As an incentive,whether the implementation of equity incentives to improve the company's performance or not attract the attention of theory world and occupation world.In this paper,we explore the influence of the implementation of equity incentive on the profitability of the listed companies,and through empirical research to analyze the factors which influence the performance of equity incentive.First,a brief introduction about background,purpose and research methods has been made.Second,elaborating foreign and domestic theory about equity incentive.Third,the relevance of the theory of equity incentives has been reviewed which lay a theoretical foundation for the study.Fourth,basic concepts of equity incentive were elaborated,comparative analysis of selected samples from three aspects.Last,this paper selected six factors which may affect the implementation of equity incentive effects to analysis,through the establishment of regression model,and ultimately concluded.The conclusions of this article are as follows:After the implementation of equity incentive,the sample company's overall performance has improved,but showed a downward trend year by year.This may be because Chinese equity incentive system is not mature enough to use,relevant laws and regulations is also a progressive develop in the past five years,but not perfect.In the future,the implementation of equity incentive will have a good internal and external environment,and it would perform better and better.Future more,the conclusion of empirical testing shows that there are a lot of factors have a significantly positive correlation with equity incentive,such as ultimate controller,the growth of the listed companies,the ratio of equity incentive,the mode of equity incentive and industry.There is not a correlation between company-size and equity incentive.The main contribution of this paper is:In the study of this article,the study sample of select was a real sense of listed companies to implement equity incentives.Selected the listed companies which announced equity incentive plans after 2005.The conclusions of this paper is based on a better external and internal environment,so it is more useful for the future study.At the same time,the study of this paper not only based on the whole samples,but also from three dimensions.Conclusions are more cautious.This article also explore the factors which impact equity incentive effect.This findings provides a reference for the future implementation of equity incentive.This paper has some shortcomings:Since the number of Chinese listed companies which use equity incentive is limited,the sample size is very small.Because the limitation of capacity,this paper only explore three dimensions and six factors which affect the equity incentive,this problem will be solved in the future study.