The Empirical Research Of The Relationship Between Equity Incentive And Chinese A-Share Listed Companeis’Performance

Based on the peculiarity of the economy and of capital market China andchoosing listed companies as starting point, this paper makes theimplementation of equity incentive problems as the research object. Firstly,we discuss the correlated concept and basic theory of equity incentive andthen review and summarize the domestic and overseas scholar’s researchliteratures. Later, we retrospect the policy revolution and overview theimplementation of equity incentive in China.Utilizing the empirical research method, this paper tries to check whetherequity incentive has positive impact on companies’ performance. We pickdata from Shanghai and Shenzhen stock markets2006to2011A-share listedcompanies (141companies). We establish linear regression analysis model tovalidate the hypothesis–implementation of equity incentive problems ispositively related to corporate performance of the same year.The empirical analysis results show that there is the positive relationshipbetween proportion of management shareholding and corporate performance.Moreover, company’s size and growth has significant positive correlationwith the company performance. However, total asset turnover, the asset todebt ratio and stock concentration have no impact on the companyperformance.Finally, we extended cause analysis and give3proposals that include thedesign of judicious equity incentive plan, accelerating the construction ofcorporate governance structure and improving the manufacture of capitalmarket efficiency.