Research On The Effects And Nfluence Factors Of Equity Incentive

As a long-term incentive method, equity incentive mechanism is introduced intoChina in the1990s, with the execution of the《listed companies equity incentive method(try out)》in2006, equity incentive mechanism of our country has entered into the phase ofdevelopment. But there are many problems in the implementation process of the incentiveplans in our country. The purpose of this paper is check the short-term effect andlong-term effect of equity incentive, then analyze the influence factors of equity incentiveimplementation effect.At first, this paper uses the event study method to analyze the short-term effect ofequity incentive and uses the financial indicators study method to check the long-termeffect of equity incentive, finds that the short-term effect of equity incentive is significantbut long-term incentive effect is not good. Secondly, adopts empirical research method intwo steps to test the influence factors of equity incentive implementation effect. The firststep, tests various elements of the equity incentive plan implemented on equity incentiveeffect by building a model, finds that incentive strength and implementation effect has aninverted U shaped relationship, incentive validity and implementation effect has a cuberelationship, exercise/ownership condition and effect implementation has a significantlypositive correlation. The second step, applies the method of canonical correlation analysisto explore the influence of control configuration to equity incentive plan design, finds thatit has a significant influence on incentive plan design as a whole, and the nature ofultimate control person, the first big shareholder control and ownership concentrationaffects the implementation effect through incentive strength and incentive validity. Finally,it puts forward specific suggestions and solutions according to the study results.The innovation of this paper is that: the former research of equity incentive is moreabout the effect of equity incentive for company performance, few of researchers study theinfluence factors of equity incentive implementation effect, and the study is on the firmsize, growth and risk which is single. This article finds the direct influence factors fromthe perspective of equity incentive plan design, and on this basis, it studies the deeper reasons of implementation effect from the perspective of control configuration whichmakes the research more systemically.In this paper, on the one hand, the research can make up for the inadequacy ofprevious theoretical research, in addition, according to the research conclusion, it canguide the companies which will implement the equity incentive plan in the future, makethe equity incentive plan to play a real role in the incentive effect.