Empirical Research On Equity Incentive Exercise Results Of Listed Companies And Shareholder Wealth

Equity incentive is a way to solve the agency problem between the owner and the management of a company,which is based on the principal-agent theory and human capital theory.Shareholders take the company’s growth in enterprise value as the condition,improve the company’s operating conditions as the goal to urge them to work hard in the work of the management granted a certain proportion of equity,as a shareholder to bear the risk and residual income of the enterprise as a means of operation and management.China’s stock market started late,compared with Europe and the United States,market construction is not perfect.After 2006,China carried out the reform of non-tradable shares and pushed forward the equity incentive system.Stock options give the target the right to buy shares at a low price in the future,and in the long run,they also tie their interests to the development of the company,so as to achieve the incentive purpose.Since the listed company has the intention of equity incentive,the market will produce the expectation because of its action.What kind of reaction will the market make to the exercise result of the stock option incentive model and what kind of impact will it have on the shareholder’s wealth is the issue of this paper.In 2006 to 2018 in stock options as an incentive target listed companies as the research object,with the announcement of listed companies as a source of information,select 122 to choose stock option incentive right to finish the line and the boss is as sample,using event study,found that the capital market for the company released the option incentive results announcement of exercise have a significant market reaction is not zero,the listed company equity incentive line right result announcement before and after the cumulative excess returns significantly positive correlation.The paper also finds that the factor characteristics of managers’ equity incentive,such as the duration of equity incentive,incentive influence and so on,have no significant influence on the accumulative excess return.In the announcement of exercise results,the announcement of the proportion of exercise results with no right has no significant effect on the cumulative excess return rate.It shows that market investors are more concerned about whether there is no right in the result of equity incentive plan than how many options are not exercised.Finally,this paper suggests that listed companies can choose two or more equity incentive targets for incentives,especially virtual stocks or stock options.And the suggestion our country carries on the more standard management in the information disclosure.