The Research On The Impact Of Equity Incentive On Earnings Management

Since the promulgation of the Equity Incentive Scheme for Listed Companies(Trial Implementation),more and more listed companies have announced the implementation of Equity Incentive Scheme.As of December 31,2017,3445 listed companies in China have announced and implemented equity incentive plans.With the increasing number of Listed Companies Implementing equity incentive plan,the negative effect of equity incentive also appears.Because of the existence of information asymmetry,managers manage earnings to obtain excess remuneration based on compensation,capital market contract motivation and so on,which has attracted the attention of scholars.However,in recent years,China has only implemented equity incentives of real significance.Previous studies are limited to samples,and the research is not universal.Domestic scholars seldom discuss the relationship between equity incentives and earnings management from a multi-element perspective,and mostly use the virtual variable method to test the relationship between the two,rarely from a quantitative perspective.Angle analysis.Therefore,based on the principal-agent theory,this paper chooses 667 listed companies in Shanghai and Shenzhen A-shares to study the impact of equity incentives on earnings management.This paper has a certain practical significance for the design of equity incentive scheme,regulating earnings management behavior,and providing direction for the supervision of regulatory authorities.Firstly,this paper combs the relevant literature on earnings management and equity incentive at home and abroad,then introduces the basic elements and related concepts of equity incentive,and introduces the relevant concepts of earnings management from the methods,means and measurement models of earnings management.Then,based on the theory of the first two chapters,this paper puts forward hypotheses about the relationship between equity incentive and earnings management from multiple perspectives.This paper takes A-share listed companies which announced the implementation plan of equity incentive from 2015 to 2017 as research samples to explore the relationship between equity incentive and earnings management.Firstly,this paper analyses the different time points of the implementation of equity incentive plan,and finds that the earnings management degree after the announcement of equity incentive is stronger than that before the announcement date.Secondly,the earnings management under different equity incentive modes is compared and analyzed.It is found that the earnings management under stock option incentive is stronger.Then we use multiple regression method to explore the relationship between the intensity of equity incentive and the duration of equity incentive on earnings management.We find that the intensity of equity incentive is positively related to earnings management,while the duration of equity incentive is not related to earnings management.In the end,this paper summarizes the conclusions of the study based on the results of empirical analysis,and puts forward some suggestions for the problems found in the study.