Research About The Corporate Performance Impact Of X Company's Equity Incentive Plan

Equity incentive is a talent strategy,which is a kind of long-term incentive mechanism on the implementation of company.This kind of incentive mechanism to make the operator incentive object,and the company form a community of interests,gives the company's equity incentive object,can also be involved in management decisions,and the company is not only a employment relationship,also can share the profits and risks together,thus effectively promote the company's long-term development.The market economy of our country has a steady development and the overall market environment also become more specifications,as well as the equity incentive in western companies implement instance,our country's listed companies also began to slowly try to equity incentive plan.Although there is a warning from west companies,but equity incentive in China started too late,development time is not enough,not kept up with progress related systems at the same time,many companies did not achieve the desired effect after the implementation of equity incentive.This article through to analysis the market reaction and finance effect about X company's three times equity incentive plan summarizes the existing problems in the process of equity incentive to implement,and make suggestions,to provide the reference for other company.This article first to analysis the principal-agent theory,the two factor theory,human capital theory,the basic theory of the financial performance evaluation and the relevant research results on equity incentive,and conclusion the corresponding theories and research results as the theoretical support of this case.And then to analysis X company who is the first implement equity incentive plans as the research sample,using event analysis method for the three times equity incentive plan window period calculation and analysis on the market reaction,and analyzed the company's financial performance changes after the implementation of equity incentive plan,finally sums up the existing problems and give some advice.And next use the event analysis,to analyses the implementation of equity incentive plan about X company's short term market reaction and medium one,by calculating the cumulative abnormal return to measure the market reaction,from the perspective of market whether the three times equity incentive plan is successful,and to analysis the influence how big and long.It is found that:1.the equity incentive plan is limited and depends on the market environment.The trend of the market index determine the equity incentive plan.In the doldrums of the stock market,the equity incentive prone to failure.2.Through the study of market reaction,it is found that the short term effect of equity incentive is obvious,but the medium term effect is less.In a period of low stock returns,they are negative both the short and medium.3.That the impact on financial performance was mainly on the profitability side,with little effect on other aspects of a company's ability.4.the design of the equity incentive scheme has some questions like performance appraisal system is not sound,the exercise price is too high,inadequate funding sources and so on.Finally,this article puts forward some ideas and suggestions on the problems existing in the equity incentive scheme of X company.