The Empirical Analysis On The Positive Impact Of Stock Incentive Compensation On Performance Of Listed Companies

In recent years, stock incentive compensation has became the focus of the domestic theorists and practitioners. Stock incentive compensation gradually been recognized by many companies, they has worked out plans of stock incentive compensation. The conclusion of foreign scholars for stock incentive compensation effect is uniform, the positive impact of stock incentive compensation on listed companies performance is generally recognized. But the conclusions of domestic scholars are different, actually managerial ownership is not necessarily improve company performance.Based on this research background, trying to use normative and empirical analysis to find out, whether stock incentive compensation can promote company performance, which kind of company is more suitable for stock incentive compensation. This study is mainly based on the interests of the convergence hypothesis, digging trenches sober hypothesis, risk aversion hypothesis. According to interests of the convergence hypothesis, stock incentive compensation lead to the targets of shareholders and managers are consistent, reducing agency costs and improving business performance. While the main point of digging trenches and risk avoidance hypothesis is, stock incentive compensation has a negative effect on performance of listed Companies. What is the appropriate proportion of stock incentive compensation to general capital is need to be resolved.The data from China’s A-share listed companies is during January2009to December2012, we use principal component analysis and the panel regression to analyze the data. Independent variable is the proportion of stock incentive compensation to general capital, While using control variables and more scientific panel data to build model. It is verified there is regional effect between stock incentive compensation and listed companies performance by using threshold regression method.We found that equity incentive and corporate performance is significantly and positively correlated. Next, I verified that, when the incentive is implemented in different companies,the positive impact of Stock Incentive Compensation on listed companies performance are different. The results showed that the regional effect does exist.In this paper, author use panel data which is more scientific to build the model, and using the threshold regression which is more scientific and advanced methods, So the conclusions are credible and practical. The study also has the following shortcomings:First, this study did not consider the changing internal and external environment that may have affect the stock incentive compensation or performance of listed companies. In addition, stock incentive compensation has not been popular in our country, there is a small amount of sample, could lead to the existence of a certain bias results and the actual results.So there may be some deviations between the results and actual situation.