Research On The Relationship Between Equity Incentive And The Listed Companies' Performance

Now China's capital market is in a period of the system construction. The incentive system of the listed company's executives, as the most important long-term incentive mechanism, has been put on the agenda. "The Management Measures of the listed companies'shares incentive (for trial implementation)" was issued by China Securities Regulatory Commission in 2006. It provided equity incentive reform policy guidance and made the possibilities of the implementation of China's listed companies'equity incentive reform. The research about equity incentive in western countries was started relatively early and provided some mature opinions for the study. The economy of China is undergoing economic restructuring. Although the listed companies are in special environment and conditions, many scholars in this field still try to make some research and explore in recent years. However, the research results and opinions are quite different. In order to observe the real influence that the equity incentive can make to the listed companies and the real cause of the effect, it is necessary to make deeper research on that.The objective of study is researching the relations between the equity incentive and performance of the listed companies. The main contents include the theoretical basis of equity incentives, the mechanism of the listed companies'incentive role, Empirical Analysis between stock incentives and the performance of listed companies, and the conclusion discuss. The research uses formal analysis and empirical analysis's method. After studying the theoretical basis of equity incentives, it makes research on the relationship among company performance, company scale, debit to asset rate and equity incentive. On the basis of theoretical analysis, adopting the data of listed companies from 2009, and using multivariate regression methods, the paper analyzes the influence on the performance of listed companies. Empirical results verify the authenticity of the hypothesis. It gets the model of equity incentive and the performance and also finds equity incentive modest proportion in the empirical analysis.The main conclusions of the research are: appropriate equity incentive can improve the performance of the company; the relationship between the equity incentive and corporate performance is not linear, the impact on corporate performance changes with the equity incentive ratio's change; there is a certain equity incentive appropriate interval, the equity incentive ratio should be controlled. Finally, in accordance with the conclusion, the study analyses the existing problems when implementing equity incentive in China now and the corresponding policy recommendations.