Research On The Impact Of Listed Company's Equity Incentive On Company Performance

The equity incentive system is an incentive system used by companies to reward company managers or key personnel.Since the reform of equity distribution in 2005,the equity incentive system has been widely discussed and concerned by the academic community.Since some foreign countries such as the United States and Japan introduced equity incentive systems earlier,there are a large number of related studies and literature abroad to verify the correlation between equity incentives and corporate performance.Academia in China has also done a lot of theoretical and empirical research from the model and design of equity incentives,the implementation effect of equity incentives,and the correlation between equity incentives and the performance of corporation.After the China Securities Regulatory Commission issued the "Measures for the Administration of Equity Incentives for Listed Companies(Trial)" at the end of 2005,equity incentives have also been in full swing in China.Its main purpose is to solve the align agency and corporate objectives in turn improving corporate efficiency and corporate value.Based on the above background,this article takes the issue of equity incentives for listed companies in China as the research subject.Based on previous scholars’ research,the data of listed companies from 2015 to 2018 is selected from CRMAR as the research sample.Human capital,incentive theories and principal agent theories was used as the basis of this research.A combination of literature research method and empirical research method was used to study the correlation between equity incentives and the performance of listed companies in China,the relationship between equity incentive model and company performance,and the correlation between the equity holdings of listed company managers and corporate performance.The conclusions of this paper provides empirical and theoretical support for the correlation between equity incentives and the performance of listed companies in China to a certain extent.This article selects the listed companies in the Shanghai and Shenzhen stock markets in the past four years as the research sample,excluding the ST shares,datamissing,obvious abnormality,financial industry,and samples with major events announced;a total of 409 samples were analyzed.Taking ROA as the dependent variable and equity incentive as the independent variable,the company’s size(size),corporate growth(Growth),asset-liability ratio(Deb),area(Area),and industry(IND)is used to establish a model for the control variable.Stata 17 is used to conduct an empirical analysis of the multiple regression models.The relationship between equity incentives and corporate performance is studied separately.The impact of different forms of equity incentives on corporate performance and the proportion of equity incentives Secondary correlation.Empirical analysis shows that: equity incentives have a positive impact on the company;restricted stock methods have no significant effect on improving company performance relative to stock option models;listed company incentive ratios have a non-linear relationship with company performance,that is,"inverted U "Type"correlation,the impact of the incentive ratio on the company’s performance increased first and then decreased,the best shareholding ratio was 4.57%.Finally,this article puts forward relevant suggestions for perfecting the equity incentive system based on the conclusions.This includes the first is that listed companies should choose an equity incentive plan which is suitable for the enterprise.Since the equity incentive model is not single,there is no accurate empirical proof that which model is more effective.Therefore,the listed company can choose the best plan based on the industry field and scale of the enterprise,and choose the appropriate equity incentive ratio and incentive period.Secondly,the relevant departments should strengthen the supervision of listed companies,which includes the filing of equity incentive plans,information disclosure,the price of listed companies and the phenomenon of launching equity incentive plans before major benefits.The third is to strengthen the external environment for equity incentives.The first is the supervision of intermediary service agencies to avoid their being bought by management,and the second is to increase the responsibilities of independent directors and financial advisers.They must show fairness to listed companies and correct equity incentive schemes that harm the interests of small and medium shareholders.