Study On The Equity Incentive Effect Of Enterprises

Principal-agent theory liberates the owner of the enterprise from the role of the operator of the enterprise,and greatly exerts the professionalism of the talents.However,the differences in the goals pursued by the principal and the agent,as well as the asymmetry of information and other factors,make the conflict of interests between the two increasingly fierce.The emergence of equity incentive has become a good solution to agency problems in corporate governance,and it is particularly important for the long-term sustainable development of enterprises.With the wide spread and application of equity incentive in the world,in order to better corporate governance,state-owned listed companies in China have gradually introduced equity incentive system,hoping to overcome the lack of long-term incentives for the management of state-owned enterprises.Owing to the different conditions for the formulation of equity incentive plans and the imperfection of relevant policies and laws and regulations,in the process of practical application of equity incentives,some managers often manipulate accounting indicators to achieve the exercise conditions,so as to obtain high returns.In fact,a large number of companies that have implemented equity incentive plan have not improved their performance level,but hindered the smooth operation of the company.Therefore,it is particularly important to study the role of equity incentives.This paper takes HX company as a case study object.Firstly,it introduces the general situation of the company,the ownership structure and the implementation of equity incentives.Then,through market reaction analysis,financial analysis and non-financial analysis,the effectiveness of equity incentive implementation is studied.Market reaction analysis mainly uses the event study method to analyze the long-term and short-term market reaction before and after the implementation of equity incentive through the calculation of excess return.The analysis of financial indicators is mainly to calculate the financial indicators of enterprises.At the same time,combining with the characteristics of state-owned enterprises and the design ofexercising conditions and other factors,this paper analyses the relevant financial indicators of each key time point of stock option,such as announcement day,granting day,exercising right day and actual exercising right day,and compares them with those of other related companies in the same industry,and then observes equity incentives.What impact has it had on the operation of enterprises? Non-financial indicators analysis from the exercise of power performance conditions,option authorization time point,talent mobility,enterprise R&D situation to analyze the effectiveness of equity incentives.Finally,the method of Economic Value Added(EVA)is used to comprehensively consider the financial performance of enterprises.After a series of analysis on the implementation effect of equity incentive in HX company,it is found that the implementation of equity incentive has not achieved the expected incentive effect,but has induced earnings management behavior of management,and there are signs that the equity incentive plan is controlled by managers.By choosing the incentive time point,granting day-ahead stock price manipulation and adjusting non-recurring profit and loss items,management can improve the business performance of enterprises and reduce the difficulty of exercising power,so as to execute power smoothly and realize their own interests.In view of the shortcomings and problems in the implementation of equity incentive in HX Company,this paper puts forward relevant suggestions for the reference of relevant enterprises and departments,hoping to further improve the relevant research theory of equity incentive system in China.