Analysis Of The Effect Of Stock Incentive Implementation

In order to further alleviate the principal-agent problem caused by the separation of management and ownership,and to alleviate the conflicts of interest between executives and shareholders,many countries in the world have formulated equity incentive plans.The emergence of equity incentive mechanism in China was later than that in developed countries.Due to China’s imperfect market mechanism,the implementation of equity incentive policy was confronted with various uncertainties.Compared with the relatively mature incentive mechanism in foreign countries,the implementation of China’s equity incentive plan faced a narrower range of incentive objects and a single incentive mode.As China securities regulatory commission has repeatedly revised and practiced the equity incentive management method of listed companies,the implementation of equity incentive in China has been effectively standardized.In order to further alleviate the agency contradiction and to promote the long-term improvement of enterprise performance,after the 1990 s,Chinese enterprises set off a wave of equity incentive plans.From the perspective of incentive theory,equity incentive made use of the demand of the motivated object to pursue the maximization of their own interests,and made use of this feature to alleviate the disadvantages caused by the separation of two rights,so as to realize the long-term benign development of the enterprise and the "win-win" of the manager’s personal interests.In order to fully verify this principle and to restore the possible influence path of equity incentive as comprehensively as possible,this paper adopted the method of combining full samples and case analysis to conduct research.This paper took the full sample perspective as the entry point,took REVA as the enterprise value measurement index,and adopted the double difference method to judge the approximate effect of equity incentive after excluding the influence of financial industry and other factors.The empirical results showed that the rate of return of economic value added(Eva)has been significantly improved in the enterprises that carried out incentive plans,which has nothing to do with incentive intensity and various control variables.Whole sample analysis provided the foundation for the case analysis of YUTONG Bus Co.,Ltd..The case analysis consisted of the analysis of the change trend of YUTONG Bus Co.,Ltd.and the decomposition of the specific indicators resulted in the variation of REVA.Besides,comparing and analyzing the YUTONG Bus data and the intra-industrydata of the implementing group and unimplementing group showed that the weighted average capital of the implementation group was lower.It was impossible to judge the change of traditional financial indicators only from the change trend of REVA.Therefore,this paper also employed the data of major financial indicators for 10 consecutive years to make a grouping comparison of profitability,operating capacity,debt paying ability and growth ability of the industry.To fully carry out the horizontal and vertical comparison in the industry,the paper used DFA to conduct dynamic factor analysis based on the analysis of key financial indicators.Changes in enterprise value and financial indicators cannot fully explain the incentive effect.Therefore,this paper added an event study method to the case analysis to observe the abnormal return rate and stock price fluctuations before and after the incentive event,and found that the market was more optimistic about YuTong’s incentive plan behavior.According to the non-financial capacity method,in view of the characteristics of YuTong Bus industry and incentive scheme,changes in the number of R&D personnel and R&D expenditure related to R&D were selected as the analysis points.It was found that YuTong company has attracted more R&D personnel since its incentive program was launched.