Study Of The Equity Incentive Utility In Listed Companies

Equity incentive for senior management was an efficient incentive mean that appeared in the high economic development phase and was widely used. Practice proved that equity incentive execution could raise the operation efficiency and the value of enterprises. With the tranform from planned economy to market economy and the foundation of capital market in our country, some enterprises also introduced equity incentive plan for senior management. But there was no definite answers to the questions that whether equity incentive did work at present capital market in our country, how equity incentive utility be reflected and which relationship existed between senior management shareholding and company performance. So this thesis had significant theorical and realistic meaning.Under the guidance of the corporate goverance theory, human capital theory, principal-agency theory, Maslow's hierarchy of needs theory and Herzberg's motivation-hygiene theory, this thesis made use of research methods such as entropy analysis, regreesion analysis and curve estimation, built perforamance assessment model of listed companies based on entropy method, investigated the relationship between senior management shareholding ratio and company performance and arrived at the function expression and its monotony intervals, answering the question of senior management shareholding ratio.This thesis mainly included six chapters. The first chapter was introduction. It principally included the research background, research purpose and significance, research contents, research methods and main work and innovations. The second chapter was theory foundation and literature review. It included theory foundation and literature review and established firm and substantial basis for the following empirical research. The third chapter was the apperance and current situation of equity incentive. This chapter introduced the apperance and current situation of equity incentive overseas, including the history, execution mode and the characters of current situation, and then introduced the current situation of equity incentive in our country, including the background and the process of implementing. The fourth chapter was equity incentive utility and its measurement. This chapter firstly stated equity incentive utilities that were widely accepted all over the world. Secondly, this thesis analyzed and studied every measurement standard in detail and chose company performance which was most easily quantized and paid attention to as measurement standard. Thirdly, on the basis of comparision of every assessment method, this thesis finally selected intergrated financial indicators to appraise company performance. The fifty chapter was empirical analysis of equity incentive. This chapter was the core of this thesis and it mainly included three parts. (1)Research hypothesis. This thesis brought forward four hypothesis using former scholars' research as a source of reference. (2)Research design. This part firstly introduced the sample selection method; secondly, it used reliability analysis to select performance assessment variables and made use of KMO test to ascertain performance assessment method; then it constructed the performance assessment model of listed companies and the model between senior management shareholding ratio and company performance. (3)Empirical research. This part included entropy analysis, regression analysis, combined theory analysis and other influence factors' research.This chapter was the final part of this thesis. It summarized the main conclusions of empirical research, put forward suggestions and pointed out the research deficiency and the future research direction.This thesis arrived at the main conclusions through qualitative analysis and quantitative analysis as follows:(1)There existed nonlinear relationship between senior management shareholding ratio and company performance.(2)Combined theory existed between senior management shareholding ratio and company performance.(3)Company growth ability hardly affected senior management shareholding and company performance.(4)Company scale obviously affected senior management shareholding and company performance.All in all, the main work and the innovation of this thesis was that establishing the cubic function relationship model and attainment of monotony intervals, which provided the basis for the definition of senior management shareholding ratio.