Study On Exercise Performance Conditions Adjustment Of Equity Incentive For Real Estate Listed Companies

Equity incentive is a long-term incentive method of modern company management,which aims to take the equity of the company as the interest carrier,converge the interests between shareholders and executives of the company,and solve the principal-agent problem.However,due to the existence of information asymmetry and other problems,managers with self-interest motives may seek benefits through equity incentives,which violates the original intention of the company to implement equity incentives.The performance condition of exercising power in equity incentive is the key factor that decides whether the management can execute power or not,and how much effort it needs to make to realize the exercising power.Therefore,the formulation of the performance condition of exercising power is often the result of the game of interests between shareholders and management.Through the analysis of exercise performance conditions,it can be seen that whether the formulation and adjustment of equity incentive plan are influenced by negative factors and rent-seeking by the management or influenced by positive factors and reasonable incentives.The real estate industry of our country has the characteristics of strong policy and strong periodicity.Many real estate listed companies have implemented equity incentive,and the application of equity incentive is quite mature.The equity incentive plan has the characteristics of high incentive level and wide incentive scope,and the tendency of multiple implementation of equity incentive is obvious.Among them,all real estate listed companies that in non-initial equity incentive plans have adjusted their exercise performance conditions.The factors affecting the adjustment of the exercise performance conditions of real estate listed companies are complex and diverse,the analysis and interpretation of this phenomenon is helpful to further understand the operation mechanism of equity incentive,and also has important reference value to analyze the reasons why listed companies implement equity incentive plan.It is also of great significance to improve the information disclosure mechanism of equity incentive and promote the healthy development of capital market.In this paper,Poly Real Estate is selected as a case study.The first equity incentive plan formulated by the company in 2011 failed to be implemented in the third period(2015),and the performance conditions of implementation were adjusted in the second equity incentive plan in 2016.According to research of the previous scholars,this paper first analyses the characteristics of the performance conditions of the second-phase equity incentive plan of Poly Real Estate from four aspects: quantity,selection,nature and standard.The results show that the adjustment of the performance conditions of Poly Real Estate is not affected by the obvious self-interest motivation of executives,and the main factors affecting the adjustment of the exercise performance conditions of Poly Real Estate are not clear.The process is not clear,so the previous feature analysis method has some limitations.In order to further analyze the factors affecting the adjustment of exercise performance conditions,based on the Optimal Contract Theory,this paper conducts in-depth analysis from the macro,meso and micro levels.The results show that the adjustment of the exercise performance conditions of Poly Real Estate is actually influenced by the policies and regulations,industry background,corporate strategy and other factors.The research starts from the phenomenon that listed real estate companies adjust their performance conditions in non-initial equity incentive plans,analyses its influencing factors,expands the scope of domestic scholars' research on equity incentive.At the same time,a case study is carried out,which is more in line with its own situation.It is found that different influencing factors will prompt company management to make different decisions and formulate different performance conditions.This paper puts forward Suggestions to improve the analysis system of exercise performance conditions of equity incentive,and also puts forward some pertinent suggestions on the formulation of relevant norms and information disclosure of equity incentive in China.However,the article also has shortcomings.First,due to the lack of information disclosure,it is difficult to master more information in the research process.Part of the demonstration basis directly refers to the content of the annual report of the company,and there is no specific proof process.Second,the paper only selects a single case for study,which is insufficient in breadth,and the research conclusion can't be applied to all listed companies.