The Influence Of Equity Incentives On The Market Value Management Of Listed Companies

Since the “New Nine Articles” clearly stated “encourage listed companies to establish market value management system”,the market value management of listed companies has been a hot topic in the practical and theoretical circles.As a medium and long-term incentive mechanism to effectively coordinate the private interests of the incentive objects and fully mobilize the enthusiasm and initiative of market value management,equity incentives are considered by scholars and practitioners as an important means for listed companies to conduct market value management.Can equity incentives have a positive impact on the market value management of listed companies,and how does it affect them? Based on this,the core research question of this article is raised: How does equity incentive affect the market value management of listed companies? This article selects Hikvision,a listed company that has implemented four equity incentives from 2012 to 2018,and an average of two equity incentives every two years,with a market value increase of up to four times.The research ideas of this paper are: First,by combing the existing research and theories,the mechanism of equity incentives affecting market value management is deduced,and the analysis framework of “equity incentives-enterprise value creation activities,value realization activities-market value management” is constructed in this paper.Secondly,starting from the case of Hikvision,analyze the market value management needs of Hikvision and the equity incentive plan.Third,explore how Hikvision's equity incentives affect value creation activities and value realization activities,and the corresponding effects.Finally,get the research conclusion and inspiration of this article.This study found that: Hikvision announced a reasonable equity incentive plan when the company's market value was lower than the intrinsic value,and received positive responses from investors.It raised the market value in the short term and promoted the market value to reflect the intrinsic value in the short term.The implementation of the equity incentive plan in turn promoted the incentive objects to make efforts in key value creation activities of enterprises such as human resource management,R&D and sales,and achieved the effect of intrinsic value enhancement.On the basis of the gradual increase in intrinsic value,the company has simultaneously strengthened investor relations management and other medium and long-term value realization activities that deliver the company's intrinsic value to the capital market,and the effect needs to be improved.Through literature review and case analysis,this paper concludes that: The mechanism of equity incentives affecting market value management includes: implementing equity incentives to promote the company's key value creation activities,enhancing the company's intrinsic value,and achieving “value creation”;at the same time implementing the equity incentive plan itself will Stimulate the stock price,as a good news when the market value is lower than the intrinsic value,make the short-term market value increase,and then the company's market value in the short-term reflects the intrinsic value to a higher degree,and after implementing the equity incentive plan and continuously improving the intrinsic value In the long run,companies will strengthen investor relationship management activities so that the intrinsic value is fully reflected in the capital market to achieve “value realization”.The research value of this article lies in: in-depth study of a single case,more targeted analysis of how equity incentives affect the market value management of listed companies,has certain theoretical significance.At the same time,this article focuses on Hikvision,a listed company that has implemented multiple equity incentive programs and market value management in recent years,has conducted an in-depth analysis of its equity incentive programs,and explained the connection between equity incentives and market value management,which can be used by other listed companies.Implementing equity incentives and market value management provides practical reference.