Study On The Implementing Effect Of Equity Incentive And Its Influential Factors In Chinese Listed Companies

Equity incentives are regarded as an effective means to solve the principal-agent problems and equity incentives are also hot topics for foreign and domestic scholars.The empirical research on equity incentives by Chinese scholars is mostly focused on the entire listed companies or the main board,ignoring the research on stock incentives for small and medium-sized board and Growth Enterprise Market.This paper selects the data from A-share listed companies of the main board,small and medium-sized board,and GEM in Shenzhen stock exchange and Shanghai stock exchange,and the data is selected from 2011 to 2015,in this paper we want to study the effectiveness and influencing factors of the equity incentives in the three sectors,and conducts a comparative analysis of the three boards' results.The results of equity incentive effectiveness analysis: the comparative analysis shows that the implementation of equity incentives is conducive to the improvement of the companies' performance on the three boards,and there are significant differences in the effectiveness of equity incentives between any two boards.The results of further analysis based on the DEA model finds that: most of companies in each board have unsatisfactory results in implementing equity incentives.There are very few companies that have effective and stable equity incentives,and most companies' equity incentive rankings fluctuate greatly in the five years;in general,the situation of the main board is better than that of the SME board,and in the first four years it is better than that of the GEM.The effectiveness of equity incentives for SME boards is relatively poor compared to the main board and the GEM.The development trend of the GEM is good,this may be because most of companies on the GEM are innovative companies with good growth,it is more likely to arouse the enthusiasm of senior executives.And the main board shows a downward trend,this may be because the development of the main board companies is stable,and it is relative difficult to improve the companies' performance.In terms of influencing factors,this paper used regression analysis to study how much the factors affect the effectiveness of equity incentives on the main board,SME board,and GEM.The results show that increased proportion of executive shareholding is not conducive to improving company performance.And the sustainable growth rate and ownership concentration play significant roles in promoting companies' performance.The companies' independent directors of the three boards did not play their due roles,companies on the SME board were particularly noticeable.On the three boards,the scale of board of supervisors,the degree of equity balance and the comprehensive leverage can promote the companies' performance,but they are not significant.In addition,equity incentives in non-manufacturing industry are more effective than which in the manufacturing industry.The results of the three boards are generally similar.But due to the listed companies of the three boards have different features,there are some differences in the degree of correlation between different factors and company performance.Based on the above conclusions,this paper believes that in order to maximize the effectiveness of equity incentives,the external environment of the companies needs to be improved and the internal efforts of the companies should continue.From an external perspective,improving the capital market,improving external supervision mechanisms,and establishing and improving laws and regulations can provide a good external environment for the effective implementation of equity incentives.From an internal perspective,companies need to improve their governance structure,and formulate scientific performance assessment system and equity incentive plan.Last but not least,companies should also strengthen their internal supervision.