The Research On The Plan And Effect Of Listed Companies' Equity Incentive

As the dispersion of shareholding and development of management, human capital has being paid more and more attention in enterprises. Large companies around the world actively practice new form of equity incentives, such as Stock options, in order to stimulate their manager and staff. Progress of equity incentives In China had being slow .However, , From the trial of ESO system in the company of Shenzhen Vanke Group in 1993,China's enterprises actively began to explore the equity incentive systems.Equity incentives have developed for almost ten years since 1999.With the end of equity division reforming, China's stock market began a new era. Equity incentives have gradually become the new theme with China's listed companies and capital markets. Regulations of equity incentives start with the "Regulation about equity incentives of listed company" in 2006.The author studies the equity incentive plans of listed companies, which stimulate their manager and staff from 2005 to 2008. First of all, this paper shares on the theory of incentives, including Principal-agent Theory, Reinforcement theory and Expectancy Theory. The analysis explains the principles of equity incentive plans.Secondly, describing the plans of equity incentive programs China's listed in detail after giving the related concept companies .In the empirical part, trying to explore the implementation of equity incentives and the listed company's achievements by the market reaction on the date of announcement and the financial ratios from their annual reports. In the former analysis of listed companies, we find a very short- extra gain exists before and after the date announcement, which shown the expectation of investors. When comparing the company's achievements of listed companies with equity incentives plan and listed companies without equity incentives plan, we find that, the former always has a better change of financial performance. However, the improvement shows a better WROE which is the assessment criteria of equity incentives.Finally, according to theoretical and empirical analysis, summary the full text and sums up and makes some recommendations.