Influence Of Managerial Equity Incentives Based On Corporate Control

With China’s reform of non-tradable shares of listed companies and the revision of Company Law of the People’s Republic of China, Securities law of the People’s Republic of China, the managerial equity incentives by the listed company get really began and rapid development. From2005to the end of June2011, there are322companies have announced the managerial equity incentives plan for358times. However not everyone believes that managerial equity incentive is effective. Based on this, this paper tries to study on the relationship between companies’real control and the effect of managerial equity incentives.According to influencing factors of corporate control, this paper divides listed companies into two categories:companies controlled by shareholders and companies controlled by management. Then the paper compares these two types of companies. In design stage of managerial equity incentive scheme, the paper focuses on the difference of their plan. In the announcement stage, the paper studies the difference of their influence of events on the short-term earnings of shareholders through ROM reaction. In the implementation stage, the paper studies their different effects before and after implementation.These following conclusions are achieved after the study:(1)Compared to companies controlled by shareholders, the plan of companies controlled by management is much more conducive to the interests of the management;(2)Compared to companies controlled by management, the ROM reaction after announcement of managerial equity incentives from companies controlled by shareholders is more positive;(3)Compared to companies controlled by management, companies controlled by shareholders operate much better after managerial equity incentives.