An Empirical Study On The Impact Of Equity Incentive On The Performance Of Listed Companies

The concept of equity incentive was formally introduced for the first time at the Fourth Plenary Session of the 15th National Committee in August 1999.And China has been implementing equity incentive in a real sense for nearly 20 years since China securities regulatory commission promulgated the "Regulations on Amending<Measures for the Administration of Equity Incentives of Listed Companies>"in August 2018.According to statistics,from 2010 to 2018,the number of listed companies implementing the equity incentive plan in China has gradually increased.It can be seen that equity incentives have gradually evolved from corporate luxury goods to corporate necessities,becoming a "normal" weapon for listed companies to improve corporate governance structure and improve company performance.In particular,in recent years,China's equity incentive structure has changed.It has grown from a large proportion of the Main board and a small proportion of the SME board to a large proportion of the SME board and the GEM board,and the Main board accounts for a small proportion.The SME board and the GEM listed companies have become the most active force in implementing the equity incentives in China's multi-level capital market,gradually replacing the main position of the listed companies on the Main board.However,the current academic research on the impact of equity incentives on company performance is mainly concentrated in the Main board listed companies,but there is little research on the SME board listed companies,which is an important transition of the gem market,and GEM board listed companies,which is an important supplement to the Main board market.Therefore,on the basis of discovering the above phenomena,this thesis will focus on the issue of equity incentives for listed companies on the SME board and the GEM board,and further compare it with the equity incentives of listed companies on the Main Board to explain the transformation of the equity incentive structure and provide supplements for the research in the field of equity incentive.Based on the review of domestic and foreign research literature on the impact of equity incentive on corporate performance,firstly,this thesis discusses the basic theory of equity incentive and its mechanism of action on corporate performance.Then conducts data statistics and analysis on the implementation status of equity incentives for listed companies.Then select 506 Main board listed companies and 1116 SME board and GEM board listed companies that successfully implemented the equity incentive plan during the period from 2010 to 2018,which are representative of the two groups,and using the ROE as a proxy for corporate performance,which deducts non-recurring gains and losses,and equity incentive ratios to represent the implementation level of company equity incentives,and introduces control variables such as company size,operating income growth rate,and Sino-US trade friction to build a Static panel regression model between the equity incentive ratio,the square of the equity incentive ratio,the equity incentive ratio cube and the corporate performance.Finally,the thesis studies the impact of equity incentive on corporate performance through empirical regression,and further analyzes the interval effect of equity incentive in SME board and GEM board listed companies.The results show that:(1)The main board listed companies' equity incentive has no significant non-linear impact on corporate performance;(2)The SME board and GEM board listed companies' equity incentive has significant non-linear impact and interval effect on corporate performance,with the best proportion interval of[2.99%,6.86%];(3)The equity incentive structure of listed companies in China has changed;(4)The growth rate of operating income,the concentration of equity and Sino-US trade friction have significant effects on the performance of listed companies in SME board and GEM board listed companies.Based on the conclusion of listing research,this thesis puts forward suggestions on how to develop equity incentive in listed companies:(1)Establish and supplement more targeted regulations and policies related to equity incentive in listed companies;(2)Strengthen the transparency and effectiveness of the securities market;(3)Integrate industry analysis into the design and selection of equity incentive plans of listed companies;(4)Find new potential factors that affect the implementation effect of equity incentive;(5)Seize the characteristics and advantages of all kinds of listed companies to develop the equity incentive.