An Analysis Of The Impact Of Equity Incentives On The Stock Price Of Listed Companies And The Optimization Of The Corresponding Investment Strategy

There are many investment strateries for Secondary market, including event-driven investment strategy sought after by investors. But as one of the equity incentive-driven events, investors have been not pay enough attention. I believe that choosing to invest listed companies(equity incentive stocks) that implementing equity incentive can achieve excess return: the implementation of equity incentive stocks’ provisions are substantially linked to the company’s performance, only when the performance of the company meet the requirements of the terms of the equity incentive can the implementation work. Under this circumstances, there is a high probability for the company’s management team to work harder,so as to drive growth for the company, thus promoting the company’s stock price to rise. Based on the above inference, the author analyzed the capital market’s data of the listed companies that implement equity incentive,and then found that equity incentive works well on driving up stock prices.However, many equity incentive stocks’ price change differently over the same period,and probably some perform worse than the average level. Therefore, the author conclude internal factors, external factors and the other factors from the eight variables which may determin the effect of incentive, and then dig the significant factors among these variables with the method of multiple stepwise regression and random forest variable importance rating(VIM), screening out three variables,including the proportion of incentive amount, inventory turnover and sectors listed. In the end we get the best investment stratery,that is investing the companies that listed in Sencond Board which have a more fully incentive and a higher inventory turnover.