A Study On The Impact Of Executive Shareholding On Firm Performance

Principal-agent issues have always been an interesting research topic in the field of corporate governance research.Scholars have been trying to find an effective executive incentives approach to ease the principal-agent issues,in order to maximize corporate performance.Employee Stock Ownership Plan(ESOP),which was first implemented in the United States with good results,has been used as a point of entry to research executive equity incentives,and has been attracting scholars’ attention.This paper breaks through the previous research methods,which equal ESOP to the executive stock incentive,and studies executive and core staff respectively.This paper firstly summarizes major theories and sorts out the former domestic and foreign researches done on this topic.Based on the analysis above,we believe that the proportion of executive shareholdings is positively related to firm performance and the concentration of ownership.ESOP have also been found to have a positive regulatory effect on these 2 variables,as the adjustment variable.In order to explore the relationship between the four variables in depth,this paper poses four hypotheses and constructs eight models to test the hypothesis,using empirical methods.This study uses relies on a sample of listed companies in A-share market,after excluding the companies that do not meet the research requirements,a final sample of 222 listed companies that implemented ESOP between 2010 and 2015 is presented.The main conclusions in this paper are as follows:(1)The proportion of executive shareholdings is positively related to firm performance(2)In ESOP,the scope of incentives for core employees is positively adjusting the relationship between executive shareholdings and firm performance.(3)In ESOP,the scale of incentives for core employees is positively adjusting the relationship between executive shareholdings and firm performance.We hope that through this research,we can bring some inspiration to the internal and external stakeholders to improve and promote the implementation of China’s ESOP...