The Effect Of Equity Incentive On The Performance Of The GEM Listed Companies In China

Equity incentive as a kind of long-term incentive tools for employees, produced in America in the 1950 s, for the implementation of equity incentive effect, the majority views abroad are that there is a significant positive correlation between the equity incentive and corporate performance. The growth enterprise market in China officially launched at the end of 2009, the corporate governance structure is not perfect enough,but more and more GEM companies are fierce to carry out the equity incentive in recent years,is he equity incentive mechanism from abroad suitable for the growth enterprise market in our country, how the performance of the influence to the GEM company, is worth further study.This paper combined with Chinese GEM, using the two methods to analyze and study the performance of the equity incentive to the gem listed company.Through theoretical analysis preliminarily concluded that the implementation of equity incentive mechanism can improve corporate performance. First of all, the company which has carried out the equity incentive can distribute rationally the material resources and human resource in the company,which will improve the efficiency of resource allocation, eventually to improve corporate performance and value; Second, company management objective function is consistent with the interests of the shareholders by carrying out the equity incentive, which will promote the business management to work positively, enhance corporate performance.This paper takes 132 companies listed on the GEM which has carried out the equity incentive from 2010 to 2013 as research object,and has the empirical analysis research of the factor analysis method and panel regression model. This paper choose eight financial indicators which are total return on assets, return on net assets, accounts receivable turnover ratio, total asset turnover,current ratio, quick ratio, operating income growth rate and net profit growth rate to measure corporate performance comprehensively, extract the four principal components of the factor analysis method by using SPSS software,which are operating profit ability factor, debt paying ability factor,ability factor, development factor respectively, and calculate the company’s comprehensive performance factor, in order to eflect the performance of listed companies more fully.This paper builds the panel regression model by using EVIEWS software to studythe performance of comprehensive performance factors respectively; Analyze and compare the different effects of corporate performance for the different incentive target equity incentive; analyze the both short-term and long-term effect of in authority period T + 1, T + 2, T + 3, T + 4 in incentive effect respectively in the companies which carry out equity incentive. This paper has get the following conclusions by the model analysis:equity incentive has a significant positive correlation on the performance of gem listed company; Different incentive target of equity incentive has different effect on the corporate performance, the effect of share option subject matter is better than that of restricted stock;the effect of equity incentive on the performance of the gem companies showed a trend of inverted u-shaped and has the promoting effect which rising to falling.This paper gives some suggestions and outlook finally,on the basis of analysis,only make the equity incentive mechanism perfect constantly,can the equity incentive play its role effectively, improve the performance of the gem listed company.