Research On The Impact Of Executive Equity Incentive On Coporate Performance

With the improvement of the capital market and the development of economy,equity incentives have developed in China.Equity incentive mechanism is a long-term incentive model for promoting the development of enterprises by giving core employees equity in listed companies.In foreign countries,many companies implement equity incentives in the early stages of development to help companies retain talent.After the introduction of equity incentives into China,both the growth enterprises and the mature enterprises with a certain scale are implementing the equity incentive plan.However,after the implementation of the plan,the market value of some companies has risen,and the performance of some companies has not changed.What kind of enterprises are suitable for long-term incentives as equity incentives remains to be explored;in addition,in recent years,it has been frequently reported in the media that the continued growth of executive compensation of listed companies in China despite the reality of operating losses,although most enterprises have implemented performance-related executive compensation incentive mechanism.What kind of executive compensation structure is reasonable and effective? Whether the equity incentive plan as the source of executive equity compensation will affect the performance of the company and how to set up a reasonable executive compensation structure have become urgent research topics.Based on this,this paper focuses on the relationship between executive equity incentive intensity,executive monetary compensation level,enterprise life cycle and corporate performance.At present,domestic research on equity incentives and corporate performance mostly focuses on the elements of the incentive scheme.Few scholars explore the relationship between them from the perspective of salary structure,and most scholars regard all sample companies as a static whole.Therefore,this paper attempts to explore the effectiveness of equity incentives from the perspective of the rationality of executive compensation structure,to explore whether the changes in the monetary compensation of executives will affect the effect of equity incentives.With the help of enterprise life cycle theory,the enterprise is divided into growth period and mature period,and the difference of equity incentive effect in different stages is explored in the hope of providing a new research perspective for this field.In this paper,after theoretical analysis,the hypothesis is put forward,and a multivariate regression model is constructed to test the relevant assumptions.On the basis of previous research results,12 related indicators are selected as control variables,dopted 3545 effective sample data of 907 listed companies from 2012 to 2017 in Shanghai and Shenzhen A-share markets for statistical analysis,empirical testing the relationship among executive equity incentive intensity,executive base salary,coporate life cycle and firm performance.The empirical results show that there is a positive correlation between executive equity incentive intensity and corporate performance,and the higher the executive equity incentive intensity is,the better corporate performance is.The level of executive base salary will have a regulating effect on the relationship between executive equity incentive intensity and enterprise performance,and the increase of executive base salary will weaken the positive impact of equity incentive intensity on enterprise performance.When the enterprise is in different life cycle stage,the effect of equity incentive is different,and the positive effect of the intensity of equity incentive on enterprise performance is stronger in the maturity stage than in the growth stage.According to the empirical results,in order to give full play to the positive effect of equity incentive on enterprise value,enterprises should consider many factors when designing the incentive scheme for senior executives.Including the characteristics of the life cycle of the enterprise and the level of the monetary compensation of the executive,in order to design the executive compensation incentive plan in line with the actual situation of the enterprise,better to achieve the incentive to the executive and improve the performance of the enterprise.In this paper,we take the intensity of executive equity incentive,the executive monetary compensation and corporate performance as the research object to explore the relationship between them,and further compare the differences between the growth stage enterprises and maturity stage enterprises.It adds a new basis for the design of executive equity incentive mechanism of listed companies in China,enriches the existing theories and provides guidance for the executive incentive practice of listed companies in China.