Executive Holdings And Corporate Performance

Under the background of the separation of the two rights, making the actual control of the enterprise from the shareholders to the internal management personnel.Under the principal agent mechanism, the management of the agent owner manages the day-to-day affairs, so the top management in the operation environment is compared with other people, and holds the core information of the enterprise. Stock market becomes downturn in 2008, we assuming that executives are rational investors,when executives as investors choose to buy more of the company’s stock, they become more meaningful.Business performance represents the level of management and the level of effort involved in the management. When executives on the company’s future performance holds a positive attitude that enterprise future development momentum is good will spend a lot of cash option to purchase the company’s stock, increase the share holdings of shares, then after the holdings of executives, whether executives can stimulate more of their own potential, expectation and improve enterprise performance? This is a question to be verified.The group as a case study, in November 2012 announced on the holdings of executives announcement, after a series of analysis, we found: Dianguangchuanmei executives holdings notice issued with positive market effect, can bring short-term stock price rise, in the first year after the announcement profitability has not been improved, but in the next two years showed a strong momentum of development, its profit ability, development ability, shareholder profitability than prior to the promulgation of the announcement of the holdings of executives improved. Finally,for enterprise performance changes before and after Dianguangchuanmei executives holdings, clarify the relationship between the two, according to the existing enterprise executives incentive system, puts forward suggestions to improve business performance.