Study On Effectiveness Of Equity Incentive On China Internet Enterprises' Business Performance

The equity incentive rose in the mid-20th century for solving the problem of information asymmetry which come from the separation of ownership and management in large enterprise.As an important means of governance in modern corporation,the equity incentive was positioned as a strategic plan in more time.After suffering the Internet bubble in 2000,the Chinese Internet companies come out of bottom gradually and into the stage of quickly developing.With the chance of promulgating the 'Listed Company's Stock Option Management Approach' by the Commission,the Internet companies are start to design and implement equity incentive plan.Because of the object of previous studies are enterprises in whole industry mostly,the conclusions are general.The empirical analysis between equity incentive and internet enterprises in this paper,not only enrich the theoretical research in a particular industry,but also has a practical value for internet companies.Based on the previous' studies,the paper studying the effectiveness of implementing equity incentive by China' s Internet enterprises with the method of empirical analysis.The conclusions are as following:(1)China Internet companies can improve their performance by implementing the equity incentive.(2)The relation between high-level executives-equity incentive and corporate performance is positive liner correlation significantly.(3)The effect of employee-equity incentive is more like welfare and a mean to maintain the human capital steadily,rather than incentive.By the conclusions of empirical analysis and the situation of implementing equity incentive in Internet companies,the paper put forward a proposal in four aspects:performance appraisal system,corporate governance structure,the focus of incentive object and incentive system.