An Empirical Study On Earnings Management And Share Incentives Of Listed Companies

China Securities and Regulatory Commission promulgated the Listed Companies Share Incentive Guidelines on January 4th, 2006. Next September the Trial Share Incentive Measures for State-controlled Listed Companies was issued by the State-owned Assets Supervision and Administration Commission and the Ministry of Finance. These measures will make the share incentive spread in Chinese stock companies.Executive share incentive has been widely used in modern western companies and won prominent success. The publicly listed Chinese stock companies should improve the share incentive mechanism to promote these companies'long-term performance. In order to produce a better effect of the share incentive in the future, we need to focus on the problems occurred to some listed companies with the implementation of the share incentive plans.This thesis describes the current situation of share incentive in our country. We analyses the influence of the share incentive on the listed companies and carries on research to the phenomenon that from two respects of the theory and real example. This article picks up all companies of the year of 2006, which have announced share incentive plans as the basic sample. Based on these data, the writer makes use of SPSS software to do regression analysis. We construct the measures and design the model to assess the relation between executive share incentive and earnings management. The empirical analysis draws the following conclusion: In the listed company, between executive share incentive and earnings management presents the remarkable dependent correlation. So we find evidence that incentivized executives are more likely to manipulate the earnings to make their self-interest maximize.