The Study On The Relationship Between Management Equity Incentive And Performance Of Listed Companies In China

In the modern corporate system, the enterprise ownership and management rightsare separated. While business owner co-operating and commissioning managers are inmanagement decision-making, there is a certain conflict of interest between businessowners and managers who maximize their own utility in the pursuit of the process.How to solve the principal-agent problem is particularly important for companies.Equity-based incentives as a management incentive system, has achieved greatsuccess in addressing the principal-agent problem.Equity incentive is the rights received by the operator’s. It must be given to them,enable them to participate as shareholders share the profits and make businessdecisions while also take risks. We analysis of a long-term incentives to improve theperformance of the company’s important role from the perspect of implementation inequity incentive.Through the principal-agent theory, human capital theory and the analysis oftwo-factor theory of motivation, we think that managers’ and shareholders’ interestscan be integrated by equity incentive. It can to a certain extent, solve the conflictbetween modern enterprise separation of control and residual claims.We collect data related to listed companies as a research sample from Year2008to Year2010,do the empirical research between equity-based incentives and companyperformance. Then we use multiple regression in the empirical approach, analysis theequity incentive effect to the listed companies. The empirical results show that equityincentives of listed companies on the domestic impact is significantly, and theincentive stock options have better impact on business performance.Based on the combined performance of listed companies equity incentive effectof the internal mechanisms and external mechanisms, we do some analysis and madea perfect equity incentive system. The result of a theoretical basis and empiricalevidence is very useful for our future implementation of equity incentive system.