Executive Incentive,Equity Balance And Capital Occupying

With the continuous development of Chinese capital market,an increasing number of companies choose public offering to raise funds for production and operation.Major shareholders might pledge copy rights in order to raise funds conveniently as well as cost-effectively without losing control.In this kind of environment,pledge of stock rights has made great strides.Pledge of stock rights is not the priority for fundraising,because the major shareholders may suffer tight cash flow and even the loss of companies controlling when the stock price collapses.Only when the major shareholders find themselves in financial distress,they may choose pledge of stock rights for fundraising.It was incentive that major shareholders' motivation of "tunneling" listed companies by occupying funds at this time.When we design effective mechanism within the firms to constraint behaviors of"tunneling" listed companies,these facts about one share in dominated proportion and the limited effectiveness of traditional management of companies should be considered.In this paper,using A-share companies as a sample,we verified the fact that major shareholders' capital occupation from the perspective of pledge of stock rights.We also explored whether the incentives for executives can curb "tunneling"behaviors.Furthermore,we tried to find out in what kind of ownership structure the supervision of executives would work well.The empirical analysis indicated that:(1)Major shareholders' "tunneling" after stock pledge is widespread.(2)Major shareholder's "tunneling" behaviors would be curbed when share incentive mechanism for executives comes into play.(3)The balanced equity shareholding structure has positive correlation with curbing major shareholders' "tunneling" behaviors.