Empirical Analysis On Financial Performance From Elements Of Equity Incentives

In modern enterprises,the main problems caused by the separation of ownership and management rights have always been the focus of academic attention.Equity incentive system,as an innovative mechanism that binds the shareholders' equity and the managers,is a good solution to this problem.With the continuous improvement of China's capital market,more and more companies implement equity incentive plan,which provides a solid foundation for scholars to conduct theoretical research and empirical analysis.At present,most of the research focuses on the implementation of equity incentive and the intensity of incentive,but ignores the impact of equity incentive plan and other important design elements on the implementation effect of equity incentive.Equity incentive schemes usually include seven factors,such as incentive type,incentive degree,exercise period,waiting period,reserved shares,exercise price and equity grant method.Study selected the Shanghai and shenzhen stock exchange,the implementation of equity incentive of a-share listed companies from 2010 to 2018 of the 1693 observation data as sample,with ROE,ROA on behalf of the company's financial performance measurement indicators,the equity incentive plan usually contains inspiration type,degree of incentive,the period of validity of exercise,the waiting period,reserved shares,exercise price and the way of stock grants for seven elements such as explanatory variables,the empirical test of the equity incentive plan each factor to the company's financial performance.The empirical study found that: compared with the stock option incentive model,the restricted stock incentive model is more conducive to the improvement of corporate performance.The degree of incentive is positively correlated with corporate performance,that is,the greater the incentive ratio is,the more significant the improvement of corporate performance will be,which indicates that listed companies should appropriately increase the incentive proportion when implementing equity incentive.The waiting period is negatively correlated with corporate performance,that is,the longer the waiting period in the incentive plan,the more detrimental it will be to the improvement of corporate performance.The reserved shares are negatively correlated with the company's performance,that is,the more reserved shares are,the worse the improvement of corporate performance.The exercise price is positively correlated with the company's financial performance,it suggests that the listed company should set a high exercise price to achieve the purpose of improving corporate performance;Compared with the method of granting shares by stages,the method of granting shares in a lump sum is more conducive to the improvement of corporate performance.Therefore,listed companies should give priority to the method of granting shares in a lump sum when selecting the method of granting shares.There is no significant correlation between exercise period and corporate performance.Finally,the quality of the incentive effect is inseparable from the mature capital market and the effective corporate governance structure,so it is necessary to speed up the construction of the capital market and improve the corporate governance institutions.