Executive Equity Incentive、agency Costs And Corporate Performance

Agricultural listed companies as representatives of the advanced productivity in agriculture,the sustainable and healthy development in the position and role of macro economy should not be underestimated.Agricultural listed companies not only shoulder the responsibility to promote the development of rural economy,adjust rural industrial structure,lead farmers to increase their income and wealth,but also an important pillar of the national economy.It is an urgent problem to improve the performance of agricultural listed companies in an increasingly competitive market.However,in modern enterprises,the difference of utility function between owners and operators leads to different goals and interests.So,operators tend to damage the interests of shareholders to maximize their own interests.This will cause that operators pay less attention to the long-term problems of enterprises in the process of operation and management.So,the resulting principal-agent conflict has become a major obstacle to the development of agricultural listed companies.Therefore,the owners who pursue the long-term interests of the enterprise will inevitably formulate corresponding rules and regulations,take necessary supervision measures,and implement effective equity incentive to minimize the harm caused by the problems such as managers' in-service consumption and moral hazard which caused by the principal-agent relationship.Executive equity incentive is an effective way to solve the contradiction of principal-agent and improve the performance of the company in agricultural listed companies.From the perspective of literature collection,although there are numerous literatures on the relationship between equity incentive and corporate performance,but the direction of the agriculture is very few.Because of the impact of the market environment and the particularity of the agricultural industry,the research conclusions of other industries do not necessarily apply to agricultural listed companies.Therefore,after summarizing the domestic and foreign research results,this paper first discusses the relevant theories of equity incentive,and analyzes the current situation of agricultural listed companies executives equity incentive,and concludes that the main problems are :(1)the way of the incentive of executive stock is single;(2)the setting of performance evaluation index for senior executives is unscientific;(3)the level of executive equity incentive is generally low;(4)lacking of effective capital market to support;(5)it is extremely easy to induce the short-term behavior of senior executives.And then,this paper analyzes the development of executive equity incentive and performance changes in agricultural listed companies.On the basis of theoretical analysis,five research hypotheses are put forward.Also,the relevant data of 110 agricultural listed companies from 2011 to 2016 are selected to establish the panel data model for regression to discuss the impact of executive equity incentives on the performance of the firm from the view of the two types of agency costs.In the study,executive equity incentive can significantly improve the performance of companies and suppress the second category of agency cost.But the relationship between executive equity incentive and the first category of agency cost is "inverted N",namely when the executive ownership ratio is between 0 and 14.15% or more than 45.53%,the implementation of executive equity incentive can significantly reduce the first category of agency cost.The second category of agency cost plays a significant mediation effect between executive equity incentive and corporate performance,the intermediary effect of the first category of agency cost is not significant.And 2.875% of the promotion effect of executive equity incentive on corporate performance is achieved by reducing the second category of agency cost.Finally,according to the research conclusions,the countermeasures such as improving the governance structure,strengthening the cultivation of capital market,and constantly standardizing the information disclosure system,in order to improve the performance of the agricultural listed companies in terms of management incentives.