The Relationship Between Equity Incentives And Firm Performance

The equity incentive mechanism was first developed in the United States.By granting the manager's equity,it can establish a close relationship between the manager's interests and the company's performance,achieve a win-win situation between the company and the manager,and finally eliminate the risk caused by the principal-agent problem.In recent years,with the normative guidance and vigorous promotion of relevant policies and regulations at the national level,more and more Chinese companies have begun to try to implement equity incentives.As the pillar of China's national economy,state-owned enterprises are also important participants in the equity incentive market.However,taking Erie in 2008 as an example,most state-owned enterprises have not achieved the goal of performance improvement after implementing equity incentives.Instead,the large amount of costs accrued by the equity incentive plan affects the performance of the company.So for a commercial state-owned enterprise with profit maximization as its main goal,it is of great significance to study the relationship between equity incentives and firm performance.At present,there are many theoretical and empirical studies on the relationship between equity incentives and corporate performance at home and abroad,but the empirical results have not reached a unified conclusion,and there is a lack of systematic and classified research.Combining the mechanism of equity incentive operation and related basic theories,this paper firstly selects appropriate financial indicators to construct the performance evaluation system of listed companies,and then uses the evaluation model to obtain the evaluation function of enterprise performance,and uses this as the explanatory variable;The equity incentive ratio,equity incentive method and the effective period of equity incentive are explanatory variables;enterprise scale,equity concentration,regional economic environment,industry and year are control variables,and a double difference model and multiple linear regression model are constructed,from 2006 to 2016.In this decade,commercial listed state-owned enterprises that have implemented equity incentives are used as research samples,using SPSS and Excel software for analysis,and empirical research on the relationship between equity incentives and corporate performance of commercial state-owned enterprises.The following conclusions are drawn:(1)Although equity incentive has a certain effect on the performance of commercial state-owned listed companies,it is not significant;(2)For commercial state-owned listed companies,the proportion of equity incentives,the scale of enterprises and Cor:porate performance has a significant positive correlation;(3)For commercial state-owned listed companies,in the form of restricted stocks,the incentive targets include more grassroots employees and the equity incentive plan with longer equity incentive period has improved performance better.At the end of this paper,the corresponding countermeasures and suggestions are put forward,which is of great significance to improve the effect of implementing equity incentives in commercial state-owned enterprises in China.