Research On The Influence Path Of Equity Incentives On Corporate Performance

With the increasingly fierce market competition among modern enterprises,in order to better adapt to the development of modern society and gain competitive advantage,many enterprises are constantly exploring ways to achieve good economic benefits.As the agent of an enterprise,the manager of an enterprise has the right to make strategic decisions,so he plays a key role in the strategic goals and benefits of the enterprise through his influence on the business activities and investment behaviors of the enterprise.However,the management system of separation of two powers brought about by the development of enterprises provides the managers with the post of "information monopoly",which makes the executives have the opportunity to carry out capital operation as their own interests,leading to serious principal-agent problems.At the same time,under the situation of China's economic transformation,it also exposed the problem that executives' risk aversion psychology to innovation activities hinders the realization of enterprise value creativity.Because enterprises need a long period of time and uncertainty from R&D investment to achievement realization,executives pursue short-term investment performance in consideration of their tenure,and the risk tolerance of innovation failure is very low,which leads to the enterprise It is likely to miss the best transformation and upgrading opportunities.Therefore,it is very important to stimulate enterprises to invest in innovation and improve the efficiency of capital investment.Therefore,based on the maintenance of their own interests,the owners of enterprises need to establish a reasonable governance mechanism to solve the conflicts between the two parties and balance the interests of all parties,so as to form incentive compatibility,so that managers can take the long-term interests and sustainable development of enterprises as the starting point to improve the economic benefits of enterprises.Previous research and practice have shown that equity incentive is an effective way to achieve interest compatibility and improve corporate performance.The relationship between them is more and more close.A perfect incentive system for senior executives is becoming more and more important in corporate governance.Previous studies have shown that there is a positive correlation between executive equity incentive and corporate performance,but the specific implementation effect will be different due to the rationality of executive incentive system.Therefore,through the analysis of the incentive mechanism and its impact on corporate performance,this paperexpounds the relationship between the two,in order to provide reference for the better development of enterprises.Most of the existing research focuses on the linear relationship between equity incentive mechanism and corporate performance 1,while the implementation of equity incentive has little research on the specific impact path of corporate performance,so there is research significance to explore the internal mechanism of executive incentive and corporate performance.This paper aims to explore the impact of equity incentive on corporate performance,and studies its internal mechanism from the perspectives of R&D activities,investment efficiency,internal control quality and agency cost.Through the case study of TangRenShen enterprise,this paper discusses the relationship between the implementation of executive equity incentive plan and enterprise performance and its internal mechanism,which not only enriches the analysis of the internal relationship between equity incentive and enterprise performance.Moreover,through the analysis of the specific equity incentive implementation plan of TangRenShen group,from the perspective of corporate equity incentive regulation,this paper further provides suggestions for the establishment of equity incentive plan,so that it can play a better role in improving the intensity of R&D investment,improving the quality of internal control,reducing the agency cost,so as to better improve the value creation of the company and the enterprise system The establishment and implementation of effective equity incentive provides theoretical guidance and countermeasures.