Research On The Correlation Between Equity Incentives And Dividend Distribution In The Listed Company

Under the background of separation of ownership and control of modern enterprises, the conflict of interest and information asymmetry between stakeholders lead to a serious principal-agent problem.How to balance relationships between principal and agent and reduce agency costs has contract many companies’ attention,and the scholars also dedicate to study this problem.According to dividend agency cost theory, carrying out a high dividend payout ratio is a effective way to reduce agency costs;And the implement of equity incentive, through to give a certain amount of equity to corporate managers so as to make them targets of interest convergence, can also reduce agency costs.So are two ways to resolve the agency problem,will dividend distribution policy be affected by equity incentive?We based on January 1, 2006, the Measures for the Administration of Equity Incentive Plans of Listed Companies was issued, as of December 31, 2013 for the first time disclosed equity incentive plan and the implementation of a-share listed companies for the study. This paper studies the data through the empirical study, in order to analyze the correlation of equity incentives and dividend distribution. Our study aspects are as follows :how the equity incentive plan impacts the dividend payments before and after its implementation? Does different equity incentive models have any different impact on dividend policy?Under special governance of the listed companies in China, will company executives strive for ways to maximize their value?This paper include six parts : Chapter one is an introduction.In this chapter it mainly introduces the study background and significance, research methodology and innovative features; Chapter two is an literature review.In this chapter,it reviews the relationship between equity incentives and dividend distribution as well as the relationship between the management power and equity incentives on domestic and international perspective; Chapter three talks about the relevant theory. First,it introduces the concept of equity incentive, and introduces the basic theory of equity incentive, including principal-agent theory, incomplete contract theory and theory of management powers; Next,it introduces the theory of dividend distribution, including agency theory, signal theory, a bird in the hand theory, tax difference theory and customer theory; Chapter four talk about the empirical analysis. This section includes research hypothesis, sample selection and data sources as well as research design empirical analysis.Chapter five uses empirical analysis method to study the correlation of equity incentives policy and dividend distribution policy.The sixth chapter is the conclusion.Basing on the study of the correlation between equity incentives and dividend distribution above on,this section comes to the conclusion and notes the limitation of this study,and provides some advices.This paper found the following results:(1)In the listed company of actualizing equity incentives, relative to equity incentive plan launching before, the equity incentive plan has a lower dividend payout level after launching;(2)Relative to using restricted stock model in the equity incentive plan, companies that use stock option model are more inclined to reduce the dividend payout level;(3)The greater the management power,the equity incentive effect on the dividend distribution is smaller and it is more inclined to raise the dividend payout level to obtain immediate benefits.The innovation of this paper:(1) Studying the different modes of incentive effects on dividend policy.(2) Through the perspective of longitudinal analysis to study the relationship between dividend policy and equity incentive.(3) Enriches the study sample, the sample was more detailed screening.This paper provides advices to the regulatory’s oversight of equity incentives and dividend distribution:(1) when designing incentive programmes, the dividend activity should be taken into account.(2) In order to protect the vital interests of the other shareholders, should prevent the equity incentive manipulation of objects over dividend policy, tighten regulation of dividend distribution and disclosure.(3) To strengthen the construction of corporate governance mechanisms, and to guarantee the independence of the board of directors.