Research On The Effect Of Senior Executive Stock Option Incentive And Capital Structure On The Performance Of Listed Companies In Manufacturing Industry

In 2016,the world economic development is still slow,the international trade is weak and the investment demand is not enough,with the influence of the regional protectionism,inverse trend of economic globalization and the euro zone's political economic dilemma,the global production efficiency is reduced,the world economy is still in the "low growth trap".Under the background of worldwide economic down turn,Chinese economy is also facing downward pressure such as the weak overall trend of the real economy,minus PPI growth pace.As the manufacturing industry plays an important part in our national economy,matters our country's development,is destined to be the key to the structural reform in supply side.However,through the study of net assets yield(ROE)of Shanghai and Shenzhen share A manufacturing Listed Companies in 2011-2015,the research found that the performance of Listed Companies in China's manufacturing industry presenting a stagnated even downward trend.It has always been a hot issue to study the effect of executive equity incentive and capital structure's impact on companies performance in the field of corporate governance.Since the ownership structure,agency cost and corporate value theory being put forward,academia and practical circle have been continued carry research and discussion on whether the company's capital structure and equity incentive can improve corporate governance and the performance of listed companies.In this context,the paper probes into the reason of declining performance of listed companies in manufacturing through the perspectives of executive equity incentive and capital structure.The paper takes more than 1 thousand listed manufacturing companies in Shanghai and Shenzhen A shares market as samples,using theoretical analysis and empirical analysis to research whether taking equity incentive can improve the performance of listed companies in manufacturing industry,the interval effect between equity incentive and corporate performance,and the impact of capital structure on corporate performance.Besides,if the equity incentive placed can it form a positive cooperation effect with capital structure to improve company performance.First of all,the paper found that the capital structure and the changes of its proportion will affect the company's performance and different level of equity incentive has different incentive effect through referencing relevant literature.An appropriate share incentive will make the interests of the manager and company owner consistent with each other,in which to improve the performance of company in an effective way.Secondly,through the present status of 2011-2015 the company on the performance of China's Shanghai and Shenzhen A shares of listed manufacturing companies,found that the performance of manufacturing listed companies appeared stagnant or even declining trend.Secondly,the paper found that its performance appeared stagnant or even declining through the analysis on the perfonnance of listed manufacturing companies in Shanghai and Shenzhen A shares market during 2011 and 2015.Thirdly,This paper expounds the executive equity incentive mechanism,the influence of capital structure on corporate performance,and found that executives equity incentive and capital structure can produce big effect to corporate performance.So this article hopes to explore the reason of manufacturing listed companies for decline in performance from the perspective of executive equity incentive and the capital structure.Fourthly,the paper took the financial data of more than 1 thousand manufacturing company in shanghai and shenzhen A share market in 2011-2015 as samples for empirical research,found that the equity incentive on the management layer is beneficial to improve corporate performance,and when the share proportion of the executives range within(0,0.0471],the proportion between the rate of return on net assets and equity incentive presents positive.While according to the descriptive statistical analysis,the paper found that the number of listed companies which has not yet taken the equity incentive accounted for 41.50%of overall manufacturing industry,65.02%of those companies which has taken equity incentive adopted the incentive rate of 0-0.01.Generally,the incentive scope of our country' s manufacturing industry is not wide,the degree is not high.The empirical analysis found a negative correlation between capital structure and corporate performance,while the descriptive statistical analysis found that nearly 40%of listed companies in Shanghai and Shenzhen A shares markets shouldered the total liabilities more than half total assets.The empirical analysis found that when the executive equity incentive rate combined the executive equity incentive with the asset liability ratio would produce a cooperative effect which will significantly improve the corporate performance.Finally,according to the study Analysis,the paper explores two reasons for the decline performance of manufacturing company in Shanghai and Shenzhen A share market from the perspective of executive equity incentive and the capital structure.Here came the conclusion:establishing executive equity incentive system;increasing executives' shareholding appropritely,and improving the intensity of incentives;standarding information disclosure system,and perfecting the capital market;increase the restraint effects of credits financing;debt financing should be used with executives equity incentive.