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

The equity incentive system was born in the1950s in the U.S.A. and had developed rapidly in European countries, Japan, Singapore and other places in1990s. From the development and practical experience of the Western capital markets, equity incentives play an active role in company performance, corporate value and shareholders’ interests. What’s more the equity incentive was known as the ’golden handcuffs’. And because of this more mature theory and practice about equity incentive in the developed countries, development of capital markets in China, the provisions promulgated by the China Securities Regulatory Commission and listed companies practice practicing in our country all provide a solid theoretical basis and the exact ideas for this article.The equity incentive system development is accompanied by the capital market developing. The development of China’s equity incentive system has basically gone through two stages:the exploratory stage and the specification stage. The turning point in these two stages is the implementation of the Listed Company Equity Incentive Management Approach (Trial) on January1,2006(hereinafter referred to as the Management Approach).The Management Approach provided the policy framework and operational guidance for the equity incentive of listed companies in China and promotes normative development of the equity incentive system, which listed above resulted that the number of companies implemented equity incentive was increasing and equity incentive was also increasingly becoming one of the focal points in China’s capital market.Taking into account the equity incentive playing a positive role on the capital market, the value of the company, the executive incentive and other aspects, this article will concern the relationship between the equity incentive and performance of the company, through using qualitative analysis and empirical analysis to study and draw relevant conclusions. The main framework of this article contains five aspects, such as the introduction, the theoretical basis and the review of domestic and international research, the development process and impact of the equity incentive, empirical analysis on equity incentive impacting the company performance, conclusions and outlook. In theoretical analysis, the principal-agent theory, human capital theory, motivation theory and the residual claim theory construct the theoretical support of this article. The subsequent empirical analysis, this article by using the paired samples T-test, linear regression and regression diagnostics analyze the relationship between the equity incentive and company performance. In the process of regression diagnostics, using the method of the box plot to observe outliers, this article analyzes outliers and excludes them from the sample data and then goes through the regression test, ultimately gets the more robust regression model. Finally, according to the above theoretical and empirical research and analysis, some conclusions of this article are as follows:firstly, the number of companies carried out the equity incentive increases steadily year by year, but the equity incentive model implemented is relatively homogeneous. Secondly, the implementation of equity incentive can promote the performance of the company in our country.Thirdly, the relationship between equity incentive and corporate performance was positively is a positive linear correlation, and this relationship is significant.