The Establishment Of China's Listed Companies Equity Incentive Performance And Evaluation Mechanism

As a result of the separation of ownership and management, equity incentive played an important role in valuing human capital of the enterprises property, reducing agency costs, improving corporate governance, and achieving effectively to shareholder-value-maximization.Equity incentive in foreign listed companies had been mature; while equity incentive in China's listed companies were still on early stage. China Securities and Regulatory Commission promulgated the Listed Companies Equity Incentive Guidelines on January 4th, 2006, and since then equity incentive spread in Chinese listed corporations. By April 2011, there had been 242 listed companies of more than 20 industries reported their equity incentive plans.In this field, researchers from domestic and overseas mainly focused on correlation between managerial ownership and corporate performance. Study on equity incentive results on listed corporations as well as the evaluation mechanisms was seldom found out. This thesis gave a systematic summary of basic theories for equity incentive, and reviewed the development history and current situation about equity incentive domestic and overseas. Also the thesis gave a full account of the incentive practice from A-share listed companies and the improving legal systems during the recent years. By calculating and statistically analyzing adjusted EVA data of 36 listed companies in A-share market which had completed at least one equity incentive plan, drew a conclusion that overall EVA produced by equity incentive companies were obviously more than the industry average, and showed a growth trend. Combined with the example of equity incentive plans carried out by Shenzhen Overseas Chinese Town Co.,Ltd., introducing a new cost-performance conception and using two cost-related indexes, this thesis described the relationship between the cost and the performance after the incentive plans and brought out a comprehensive evaluation of the equity incentive plans in list companies in A-share market.On the basis of the above, the idea of setting up evaluation mechanisms for listed company incentive results was clear. Building a new evaluation mechanism was as important as the other parts of the incentive plan, which would make the equity incentive mechanisms effective in a lone term. At last, the thesis summed up several principles and suggestions in building this kind of mechanisms.