Research On The Influence Of Equity Incentive To The Change Of Top Management

At the end of 2005 China Securities Regulatory Commission promulgated the "listing Corporation equity incentive management measures"(Trial), and began to implement on January 1, 2006. Since then, equity incentive has been widely used as an effective way to solve the problem of principal-agent problem, and the impact of equity incentive has become the focus of scholars. Most of scholars focus on the perspective between equity incentive and the performance of the company to study the function of equity incentive. This paper uses empirical methods to demonstrate the impact of equity incentives on top management turnover with a new perspective. When a capable manager leaves, the company’s original operating mechanism is disrupted. Even worse, the departure of a top management may take away the entire management team, which is very detrimental to the company. The purpose of this paper is to examine whether the equity incentive will restrict the change of the company’s top managements, in order to achieve the purpose of retaining the top management. In addition, the paper use property right as equity incentive’s moderating variable to analyze the difference between state owned enterprises and private enterprises. In order to retain the talented managers.This paper first carries on the literature review, then draw out the objective of the paper that the retaining function of equity Incentive. This paper uses the data of listing Corporation from 2011 to 2014 in China, through descriptive statistics, correlation analysis, regression analysis and robustness test, to study the relationship between equity incentive and top management turnover. The study found that:(1) Equity incentive can effectively restrain the top management turnover.(2) The effect of restricted stock incentive is not significantly better than the stock options.(3) Compared with the private enterprise, the top management turnover in the state-owned enterprise is more frequent; Compared with the private enterprise, the restriction of equity incentive to top management turnover in the state-owned enterprises is not significantly.