Research On Equity Incentive Effectiveness Of Listed Companies In China

liquity incentive is a means adopted by enterprises to motivate managers,which is used to solve the agency problem between managers and shareholders.However,equity incentive also exposes some drawbacks,which itself is a kind of agency problem.This paper chooses the draft of equity incentive of 752 listed companies in China,and studies the influencing factors of the degree of relaxation of exercise conditions in the equity incentive plan draft.Furthermore,for the enterprises that implement equity incentive,PSM and DID are used to match the same number of enterprises that do not implement equity incentive.From the perspective of performance and on-the-job consumption,we studied the economic consequences of equity incentive.Our research finds that:(1)The conditions for exercising rights in most of the draft of equity incentives for enterprises are loose;(2)From the perspective of corporate governance.the proportion of the first largest shareholder and the proportion of institutional investors have a certain restrictive effect on the relaxation of exercise conditions.Other corporate governance variables have little effect on the relaxation of exercise conditions.The total asset return rate and cash flow have a significant effect on the relaxation of exercise conditions of equity incentives,other variables of financial situation and company characteristics have no significant impact on the relaxation of performance indicators;(3)The stricter the design of exercising conditions,the better the effect of equity incentive,Compared with state-owned enterprises,the relationship between them is more significant in non-state-owned cntcrpriscs;(4)Equity incentive improves enterprise performance,and iin non-state-owned enterprises,the effect of equity incentive on performance is more significant:(5)The longer the exercise period is,the better the effect of equity incentive:(6)Compared with the restricted stockjncentive effect of stock option is better;(7)Compared with enterprises that implement equity incentive,enterprises that do not implement equity incentive have higher level of on-the-job consumption.Compared with state-owned enterprises,the positive correlation between equity incentive and on-the-job consumption level is more obvious in non-state-owned enterprises.(8)The looser the exercising conditions of the draft of equity incentive-the higher the level of on-the-job consumption.This paper enriches the relevant literature of equity incentive,which can provide a theoretical basis and empirical evidence for further standardizing the design of equity incentive scheme and making the system play a full role of incentive and restraint,and provide practical significance for ilproving corporate governance.