Research On The Impact Of Restrictive Equity Incentives On The Profitability Of Listed Companies

With the rapid development of China's economy,more and more companies have successfully listed,including large enterprises,but more are small and medium enterprises.After successful financing of SMEs.they face the problem of how to further develop and further improve their profitability and business perf-ormance.From the perspective of assets and financial capabilities,SMEs cannot compare with large listed companies.In the case of limited funds,how to retain talents and improve the competitiveness of enterprises has become the focus of many scholars.Restricted equity incentives are considered an important tool for successfully addressing these dilemmas.Through restrictive equity incentives,enterprises can give employees a certain equity dividend,so that employees can obtain extra income from wages through exercise.Through equity incentives,listed companies can retain talents and improve their enthusiasm for work,and indirectly improve their business performance and profitability.This paper studies the relationship between restricted equity incentives and profitability of listed companies.First of all,literature review and theoretical combing,to find a theoretical link between restrictive equity incentives and profitability.Then based on the theoretical analysis,this paper proposes two hypotheses and uses multiple regression models for empirical verification.First,we summarize the previous research literature through literature research.Most of the literature believes that restrictive equity incentives improve the profitability of enterprises by improving their production efficiency.Based on this,this paper proposes the following assumptions.H1:Companies that implement restrictive equity incentives can help improve profitability compared to companies that do not implement restrictive equity incentives.Second,the research results show that the role of directors and related agency costs will have a significant impact on business operations.Accounting standards development,especially accounting standards;restrictions on executive compensation.The standardization of reporting requirements was also discussed.Based on these studies,the paper makes the following assumptions.H2:The more restrictive equity incentives are,the stronger the profitability of the company is.From the empirical results,it is found that the implementation of restrictive equity incentives is more conducive to improving the profitability of enterprises than the implementation of restrictive equity incentives.The reason is that the implementation of restrictive equity incentives can help reduce the agency costs of senior management,and closely link the interests of executives with the business performance of the company,which will help improve the ultimate profitability.This result verifies hypothesis 1.At the same time,the more the number of restricted equity incentives,the stronger the profitability of the company.This suggests that increasing the number of restricted equity incentives will increase the extent to which the company's future profitability will affect executives.Increasing the number of restricted shares to a certain extent will increase the company's future profitability.This result verifies hypothesis 2.Based on the results of empirical research,this paper puts forward three suggestions:First,reduce the tax burden of employees' restricted equity incentive income.Second,strengthen the construction of laws and regulations on restrictive equity incentives.Third,diversify the equity incentive model.