Does Employee Equity Incentive Really Improve Corporate Performance?

As a kind of long-term incentive mechanism,equity incentive make it linked with shareholders' interests and ease the principal-agent problems to a certain extent by granting a certain number of equity incentive to the incentive object.In general,the equity incentive are divided into executive equity incentive and employee equity incentive.The equity incentives for most companies,including executives and employee incentives,range from executives equity incentives to employee equity incentives.Since the share reform,more and more companies use equity incentive as incentive mechanism in our country,hoping that it could put the interests of shareholders and employees more tightly together and alleviate the information asymmetry in corporate governance,incomplete contract and other issues,and fufill the potential of human capital to improve enterprise performance.The impact of equity incentives,especially on company performance,has always been the focus of research and practice.However,existing research focuses on executive equity incentive effects on enterprise performance,and less on the enterprise employee equity incentive effects on business performance which is actually equally important.Existing research has not come to an agreement whether equity incentive can achieve the result of incentive management and improve the company's performance.There are "convergence of interest hypothesis" and "manager defense hypothesis" two different theoretical hypothesis,and thus form the different empirical research conclusion.There are relatively few empirical studies on the impact of employee equity incentives on corporate performance.A lot of the literature on employee motivation focuses on the field of labor economics.As for employee equity incentive effect,study is divided into two kinds of theoretical hypothesis:one party thinks employee equity incentive plan through some adjustment of the enterprise property rights arrangement is helpful to improve the benefit sharing relationship between employees and shareholders,improve the staffs work enthusiasm,reduce enterprise supervision cost,improve the corporate governance,thus improve enterprise performance;The other party thinks that employee equity incentive target is inappropriate,incentive range is two wide,incentive intensity is so small,even causes a lift problems in staff.All above denies the employee equity incentive incentive effect on corporate performance.Because executives and staff members are incentive object at the same time in most of the equity incentive plans,existing research paraphrase executives equity incentive theory to study the employee equity incentive effect.But executives equity incentive theory is may not apply to employee equity incentive,We should explore the real effect of employee stock ownership incentive on business performance after controlling of executive equity incentive factors.Based on the 2006 to 2016 issued employee equity incentive plan of a-share listed companies as samples and controlling the executive equity incentive factors,We study the impact of employee equity incentive plan on enterprise performance by paired sample T test,tend to score matching(PSM)method and multiple regression method,and discusses the equity incentive effect difference between companies of different company property rights and high-tech and no-high-tech enterprises.Our study concluded that employee equity incentives could improve company performance and the intensity of employee equity incentive is positively correlated with the performance of the enterprise.Meanwhile relative to state-owned enterprises,employee equity incentives are more effective in non-state-owned enterprises than in state-owned enterprises.Relative to non-high-tech enterprises,employees' equity incentive is more effective in high-tech enterprises.The conclusions above is still true after removing the impact of earnings management from corporate performance.