Research On Executive Earnings Management In Equity Incentive Of Listed Companies In China

At present,the governance mode of a company is the separation of ownership and management rights.The separation of the two powers will create a problem: principal agent conflict.In order to solve this problem,our country also adopted the method of equity incentive in order to solve this problem.In 2006,China also implemented "stock incentive management measures for listed companies".The implementation of this method also marks the standardization stage of China's equity incentive system.However,the implementation of equity incentive in listed companies does not necessarily bring positive effects and may bring negative effects.On the one hand,the equity incentive can motivate the executives to work hard,achieve the right conditions of equity incentive through their own efforts,and finally obtain the right income.On the other hand,executives have moral hazard and information asymmetry.In order to achieve the right conditions,executives use the means of earnings management to gain the right income,which will have a great negative impact on the company.This paper uses principal agent theory,information asymmetry theory and executive ladder theory to explore the impact of executive background characteristics on earnings management in listed companies with equity incentive,and to further study how to reduce this effect.Therefore,this research topic is divided into three levels to carry out research.First,whether the executive will increase the earnings management of the company because of the performance pressure of equity incentive,that is,whether the equity incentive can increase the earnings management behavior of the listed company executives;Secondly,the heterogeneity of executives is considered,because the implementation object of the equity incentive is the executive of the company,and the management decision of the company executives will be influenced by its background characteristics,then this paper carries out the research from three aspects of senior executives' gender,age and educational background.In the end,the research aimed at the influence of the different executives' background characteristics on the earnings management of the company,and what means should be taken to better restrain this behavior,then this paper finally considers the internal control of the listed companies to do further research to verify whether the internal control can inhibit the earnings management behavior of the listed company executives.The three levels of research use the way of progressive progressive,through the three levels of theoretical and empirical research,put forward the conclusions of this study,according to the results of this paper,put forward corresponding countermeasures and research prospects.This paper selects the sample interval of 2006-2016 as the study,and adopts all A-share listed companies that implement equity incentives as research samples,and removes them according to certain standards.Eventually 839 listed companies that implement equity incentives are obtained.For in this paper,the first level of research,data part need 1:1 matching according to certain way out without implementation of equity incentive of listed companies,so as to produce the contrast and the implementation of equity incentive of listed companies research,finally get the 1678 research samples,The second level and the third level are carried out in the sub sample of equity incentive listed companies.The results of the study are as follows:(1)Compared with listed companies that do not implement equity incentives,the listed companies that implement equity incentives are more likely to perform positive earnings management during the exercise of equity incentives than listed companies that have implemented equity incentives,indicating that the implementation of equity incentives by listed companies can lead to executives' surpluses.Management behavior;based on this,to further study the impact of executive incentives on earnings management during the exercise period;the study found that in order for executives to obtain greater equity spreads and realize their own interests,the company's incentive intensity to executives is greater.Bigger,the easier it is for executives to manage positive earnings.(2)A study conducted from the background characteristics of executives who implemented equity incentives found that in terms of gender,the number of male executives in listed companies that implemented equity incentives increased,and the greater the degree of earnings management of the company,the more likely male executives to pass surpluses.Management achieves performance indicators;in terms of age,in the listed companies that implement equity incentives,the younger the senior managers,the greater the company's earnings management,ie,the young executives are more likely to achieve their performance targets through earnings management;in terms of academic qualifications,Among the listed companies that implement equity incentives,the higher the academic qualifications,the greater the company's earnings management,that is,the higher education executives are more likely to achieve performance targets through earnings management.(3)Through a further study of the internal control of the company,the study found that the better the internal control quality of the listed companies,the better the control of the executive earnings management behavior,and the earnings management of the company will be reduced.The empirical results from this paper show that among the listed companies that implement equity incentives,executives are motivated to achieve earnings management in order to achieve the conditions for exercising their rights.On the one hand,it is because the exercise conditions of equity incentives for listed companies in China are based on the financial indicators of the company,which leads the executives to use their positions to facilitate the earnings management of the company in the process of their work,and lack the incentive effect they deserve;On the other hand,based on the company's short-term performance,it will lead executives to manage their earnings in order to obtain their own profits.