The Empirical Research About The Relationship Between Executive Equity Incentives And The Listed Companies' Achievement In China

Modern enterprise system has made the ownership and operation-right separated from each other. The relationship between the owners and managers is principle-- agent. That is a contract relationship in which stockholders as clients designated senior management as agent to make some economic activities. However, in reality, the owners and operators respect different interests which determined the interests of the objective function between them are different. The aim of the shareholders is to maximize shareholder value and the long-term development of the company; and the operators are in pursuit of their own salaries and allowances, in -service consumption and the maximization of leisure time to make their utility maximized. In the process of production and management, operators hold a lot of information that shareholders are unknown; and for various reasons, all rights and obligations both sides concern could not be included in the contract. Such information asymmetries and incomplete contracts has led to "moral hazard".In order to reduce the agent risk and the agent cost, improve operating performance, it is necessary to introduce a share incentive mechanism to give the operator a certain degree of residual claims, the interests of the operators were integrated into the owner's interests.The best way of solving the principle-agent is to establish a sensitive positive correlation of the interests between the operators and the owns,make the interests of operators associated with corporate performance.This paper starts from the introduction of background, and gives a brief introduction of the purpose and significance of this research, the scope of study, research ideas, methods and research structures; research results on the share incentive of domestic and foreign scholars from theoretical and empirical aspects are described in chapterⅡLiterature Review; the third chapter describes the concepts related to the definition of equity-based incentives, including the definition of equity-based incentives, equity incentive stock source, the characteristics of equity incentives, executives of the definition and equity incentive type and mode of operation of specific incentives, characteristics and scope of application as well as the equity incentive development at home and abroad; on the basis of introduction of theories and concepts, we chose 54 listed companies which have announced the incentive plans publicly after the reform of the shareholder structure in 2006 and 2007 as an object of study in chapterⅣ. I use the proportion of executives holding when the incentive plans announced as explanatory variables, use lagged one-year ROE as a measure of corporate performance as explained variables, company size, asset-liability ratio, executive compensation, the proportion of independent directors, the first major shareholders equity ratio as control variables, the nature of the business and annual as dummy variables to study the relationship of executives incentives and corporate performance of China's listed companies.By using descriptive statistical methods, correlation analysis and multiple linear regression analysis, this paper reached the following conclusions:①The implementation of executive equity incentive help the company improve the performance②The incentive effects of different incentive patterns significantly different from③The incentive effects of different industries are different④The incentive effects of different natural enterprise are different⑤the performance of different assets size are different .At the last, the author give several suggestions about how to make the executive incentives mechanism work effectively.