Empirical Research On Relation Between Comprehensive Performance And Equity Incentive Of The Listed Companies

Stock-based incentive plans is an incentive method to solve the problem between shareholders and operators in modern enterprise, although it impulse American economy effectively in 1980's, controversy about stock option aroused from abuse of it in late 1990's. By demonstrating analysis, foreign research indicates there is distinct relativity between stock option and companies' performance. As far as the practice of equity incentive plans in China, the early explore in option incentive began in 1990's, but lack of correlative law and policy incurred the incentive effect can not arrive anticipation. It is difficult to apply the incentive mechanism in the economic environment of the day. In 2005 split share structure reform carried through, in according with administrative measure on equity incentive plan enacted. The listed companies' enthusiasm to explore the incentive mechanism was ignited again in the better surrounding. Based on that background, this paper researches relation between equity incentive mechanism and the listed companies' performance by empirical research.The purpose of this paper is trying to reveal the relation between comprehensive performance and equity incentive by empirical research. After researching correlative literature, basic concepts, research method and equity incentive actuality in China, we pick up some A-shared companies in Shanghai and Shenzhen stock market which have adopted equity incentive mechanism and fulfilled share structure reform as basic sample. By using the method of factor analysis, we get the composite performance index of these companies and hence have a linear regression analysis to study the relativity between incentive stock proportion and those companies performance. Based on linear regression analysis, we classifying the different incentive stock proportion and type to illustrate the efficiency of equity incentive mechanism. With comparing the listed companies' performance in 2005 and 2006, we draw a conclusion as that of linear regression analysis .Based on the demonstrating study, we find that equity incentive mechanism has achieved its original objective, but the efficiency is dissimilar under different incentive proportion, moreover, the different incentive modes bring different incentive effect. In the finality of this paper, we suggest we should take some measures to ensure the development of equity incentive mechanism in our country.This paper is composed of five chapters and logically can be divided into three parts. In the first part, we research the background of researching the equity incentive mechanism and have a comprehensive review of the literature in this field, moreover, we go over the fundamental theory of equity incentive mechanism with its current application status and characteristics in China. In the second part, we evaluate the performance of the listed companies and through demonstrating study we research the relativity between incentive stock proportion and those companies performance. We draw conclusions in the third (last) part, we also give some suggestions about the development of equity incentive mechanism in our country.