Study On The Equity Incentive Effect Based On The Perspective Of The Controlling Shareholder’s Character

In western countries with a relatively mature capital market, equity incentive as an importantincentive model, which effectiveness in solving the problem of agency in modern enterprise,enhancing corporate value and promoting economic growth has long been confirmed. But in chinauntil the end of2005,when China Securities Regulatory Commission issued "Equity IncentiveManagement of Listed Companies (Trial)",the equity incentive mechanism began to be carried outfairly normatively.This"management approach" allowed listed companies which have completedShare Segregation Reform to carry out equity incentive mechanism, thus, equity incentive of listedcompanies began to be carried out in the true sense. Therefore, based on this background, taking intoaccount the special circumstances of listed companies in China, the paper discusses the controllingshareholder of the enterprise, as a final decision-making body how influnce the implementation ofequity incentive plan; equity incentive as a long-term incentive mode, whether plays its role inenhancing the performance of the company effectively; and propose appropriate recommendationsto constantly refine and improve equity incentive plan in our listed companies.Firstly, this paper analyzed the relevant research results at home and abroad, defined relatedconcepts,such as the character of the controlling shareholder, equity incentive,discussed therelated theory of incentive from four aspects. Based on the the discussion of theory of incentive,systematically analyzied the status of equity incentive policy of listed companies in China. From thedevelopment process of incentive of China’s listed companies,the types of listed equity incentive,the size and target of equity incentive,the incentive model and industry distribution.Secondly, the paper selected those state-controlled and private share holding listed companiesin Shanghai and Shenzhen A-share market, which declared the implementation of equity incentivefrom2006to the end of2012as the research object, using SPSS statistical analysis software to studythe relationship between the characteristics of controlling shareholder and equity incentive effect.Inthe empirical study, using the nature of controlling shareholder,the ownership concentration, thecontrol of controlling shareholder and the separation of ownership and control as indicators tomeasure the character of controlling shareholder,using equity incentive intensity as mediatingvariable,to establish the multiple regression model with the short-term effects and long-termrespectively, to research the different dimensions of controlling shareholder’s character howinfluences the equity incentive effect, and comparative analyzed the short-term sensitivity andlong-term sensitivity of equity incentive of the listed companies.Finally, we drawn the following conclusions:(1) Equity incentive can improve the company ’s performance effectively;and the short-term sensitivity higher than the long-term sensitivity.(2)Theenterprises with controlling shareholder of the private–nature are more likely to carry out equityincentive plan than those with controlling shareholder of the state-owned.(3)Ownershipconcentration positively correlated with equity incentive effect, and long-term correlation higgerthan short-term correlation.(4)Control of the controlling shareholder significantly positive withshort-term effect.(5)Equity incentive intensity plays a partial mediator in the relationship betweenthe nature of the controlling shareholder, ownership concentration, control of controllingshareholder and the short-term effect;aiso plays a partial mediator in the relationship between thenature of the controlling shareholder, ownership concentration and the long-term effect,.Final,wepropose some policy recommendations to improve the equity incentive of China’s listedcompanies separately from the sides of characteristicsof controlling shareholder, the micro andmacro environment and the company’s internal governance structure.