An Empirical Study On The Relationship Between Equity Incentive Elements And Company Performance

Equity incentives grant employees some stocks of the company,sharing them a part of profit from the company so that employees could be motivated to work hard to achieve the goal of the company's shareholders.As a contractual arrangement,the design of equity incentive contract elements will directly determine the implementation effect.Therefore,this paper studies the effect of equity incentives from the perspective of equity incentive contract elements through empirical tests about the relationship between equity incentive contract elements and company performance,so as to enrich the related theoretical system of equity incentives and provide useful reference for Chinese listed companies in designing equity incentive plans.First of all,this article clarifies the research background related to equity incentives and proposes the research topics of this paper.It reviews and sorts out relevant domestic and foreign literatures on the relationship between the various elements of equity incentives and company performance,and forms the framework and research content of this paper.Besides,the related concepts of equity incentives are defined and analyzed theoretically.The meanings of equity incentives,corporate performance,and equity incentive contract elements are introduced.The principal-agent theory,human capital theory,optimal contract theory,and executive power theory are introduced.The analysis of theories discussed the effect and mechanism of the equity incentive mechanism.Afterwards,this article analyzes the development status of equity incentives,and selects non-financial listed companies that have implemented equity incentive plans during 2011-2016 as samples,and analyzes the current status of equity incentives through sample characteristics: The industry is concentrated in the manufacturing and information technology industries.Non-state-owned holding companies account for 89% of the total.The intensity of incentives is low and they are still declining.The incentive period is short and the incentive targets are concentrated in core employees rather than senior executives,the restricted stock model began to dominate the mainstream.Finally,this paper empirically examines the relationship between the equity incentive intensity,the distribution structure of incentive objects,the validity of incentives and company performance,and considers the equity incentive model,the actual controller,and company growth as the adjustment variables.The results show that: there is a cubic curve relationship that increases first,then decreases,and then increases between the senior management shareholdings and company performance.There is a significant negative correlation between the ratio of equity incentives intensity and company performance.The actual controller and the equity incentive mode have a grouping effect on the relationship between equity incentives intensity and the company performance.The growth of the company does not have a regulatory effect on the relationship between the shareholding ratio of senior executives and company performance,but it has a regulatory effect on the relationship between the ratio of incentives intensity and company performance.High-growth companies can suppress the negative effect proportion of the ratio of incentives intensity for performance.The relationship between the equity incentive objects distribution structure and company performance shows a three-fold curve relationship that decreases first,then increases,and then decreases.There is no significant correlation between the incentive validity of incentives and company performance.Based on this,this paper puts forward six policy suggestions: selecting moderate incentive intensity,considering more restrictive stock models,perfecting corporate governance mechanisms,triggering equity incentives from corporate conditions,and formulating a scientific performance evaluation system.