The Research Of The Route Between The Equity Incentive Contract And The Enterprise Performance

Due to the enterprise management risk preference and the objective function isn't consistent,there is a serious conflicts of interest between the owners and the managers.In order to maximize their own interests,enterprise managers tend to avoid risks,and even give up some high risk but high income projects,which will undoubtedly harm the interests of the owners.It is an urgent problem for enterprises to adopt what method can make the risk preference and the objective function of the business owners and the managers be consistent.As a long incentive measure,the management equity incentive through granted certain equity,enables managers to the identity of the shareholders to share the profits and take risks.However,practice shows that not all of the equity incentive plans have a good incentive effect.What is the core element of equity incentive plan design? What kind of equity incentive contract structure will cause the management to take the risk? What kind of equity incentive contract structure will have a positive incentive effect? The questions deserve our in-depth study.Based on the above considerations,through consulting the literature about equity incentive,we find that scholars have mainly investigated the direct effect of equity incentive contract on enterprise performance,but it has not revealed its mechanism.This paper uses the contract theory,principal-agent theory,human capital theory,management risk aversion hypothesis and risk/reward tradeoff theory to study the impact of equity incentive contract on the path of enterprise performance.In order to achieve the purpose of the study,this paper uses the Preacher and Hayes(2008)research and development of the Bootstrap method,with 2006 to 2013,the Shanghai and Shenzhen A-share listed companies implement equity incentive plan of sample data for empirical testing.The main conclusions of this paper are as follows,equity incentive contract helps overcome the risk aversion tendencies,can effectively guide the enterprise managers to take risks,promote management and business owners interests tend to be consistent,reduce the conflict of interests between the management and shareholders,and enhance the enterprise long-term performance.Including:(1)The validity of species,the level of incentives,incentives period and management risk bearing(R&D level changes,the degree of centralization management changes,asset-liability ratio changes)are positively related,namely use the stock option incentive,increase motivation and incentive period validity management helps to adopt more risk-taking behavior.(2)The risk-taking(R&D,centralization management,debt financing)is conducive to improve the enterprise long-term performance.(3)The Path of Equity incentive contract affect enterprise performance is significant,however,equity incentive species mainly through affecting management centralized management decisions,in turn,improve enterprise performance,equity incentive ratio are mainly affected by the management of research and development efforts and increase debt financing to promote enterprise performance improvement,equity incentive period is mainly through the influence of management research and development efforts and centralized management to promote enterprise performance ascension.Therefore,in the future design of equity incentive of listed companies should be clearly set fully reflect the management of risk,make the enterprise incentive system can promote the management of risk behavior to promote performance of ascension.