An Empirical Research On Stock Price Of Equity-based Incentive With Restrcited Stock

The separation of ownership and management in the modern enterprise leads to the development of equity incentive system. At present, the equity incentive system in developed countries has already entered the mature period, and formed a certain scale. From the research advanced, it seems that the equity incentive system has made an effect on either solving the agency problem, or promoting the growth of the performance. Nowadays, the equity incentive system in our country is still in the stage of development. The government has put out a series of laws and regulations, which implemented the conditions of the equity incentive system.Restricted stock has been widely applied in developed countries. While in China, it has entered the stage of rapid development in 2010. Nowadays, stock options and restricted stock occupy the same position in the system of equity incentive.At present, the research on restricted stock are mainly concentrated in the scheme design, case analysis, and the comparison of stock option model. There are few papers which analyzed the market reaction of the restricted stock.In this paper, the whole process of restricted-stock model equity incentives is analyzed. Using event study and market model, the paper calculate the average abnormal returns(average AR) and the cumulative average abnormal returns(CAR). Besides, the paper also analyzed the factors which influence the cumulative average abnormal returns.The paper has found that there is a significant positive market reaction when the listed companies disclosed their equity incentive plan. And there is a negative market reaction in both the date of record and the unlock day.The paper selected two explanatory variables and four control variables, and use the multiple linear regression model to test the relationship between CAR and the variables above. But the fitting degree of the regression is not good enough, and the model remains to be improved.