The Impact Of Equity Incentive On Corporate Performance From The Perspective Of Life Cycle

With the technological wave of enterprises and the innovation of governance models,intellectual capital has been closely integrated with the incentive mechanism and company performance.Equity incentives have become the system choice favored by enterprises at different growth stages.How to efficiently use this incentive tool has become the key point of business strategy and talent strategy for enterprises.By consulting related literature,we found that:(1)Existing research has conducted a lot of research on the mechanism of equity incentives and corporate performance,and the analysis ideas and perspectives are different,and the conclusions drawn are also different;(2)Previous literature among them,there are few studies on the impact of corporate life cycle characteristics into equity incentives on corporate performance.In the real business environment,companies in different life cycle stages have significant differences in development paths,capital structure,corporate governance and many other aspects.This article hopes to start from the unique perspective of the enterprise life cycle,and study the causes and paths of the mechanism of the effect of their equity incentives on the performance of enterprises at different stages of development,which can effectively supplement existing research.After a series of data sorting,based on the design of the paper,more than 24000 observations were selected as samples,and the effects of the full sample and the implementation of different corporate life cycle equity plans and the impact of different equity incentive elements on corporate performance were studied.The results showed that:(1)Comparing listed companies that have not implemented equity incentives,companies that implement equity incentives have better performance;(2)The equity incentive plans implemented during the growth period of the company’s life cycle,whether based on market indicators or measured by accounting indicators,influence performance more significant;(3)The company’s different equity incentive contract elements have different effects on the results of the implementation of equity incentives:If equity incentives assessment base on accounting indicators,it will have a positive effect on company performance,and the implementation effect is better than taking the stock price as a performance appraisal standards;the larger the size of the incentive object,the more obvious the effect of equity incentives on the company’s performance;there is a threshold for the intensity of equity incentives,the implementation effect first decreases before the threshold and then increases,and the incentive intensity and implementation effect show a "U"-shaped relationship;The validity period of the company’s equity incentives is not necessarily related to the company’s performance.This article intercepts part of the annual samples for verification,and uses a variety of explained variables(ROA,Tobin-q,industry-adjusted ROA)to verify the effectiveness of equity incentives in improving company performance,all reached a consistent conclusion;the application of the two-way fixed effects model and the Propensity Score Matching(PSM)to solve the endogenous problem,prove that the model design is reasonable and the empirical results are reliable.Innovative contribution of this article:According to the stage of the company,it analyzes from the idea of human capital and considers the effect of the company’s management elements,the relationship path of the company’s equity incentives at different stages on the company’s performance is studied,which enriches the meaning of the company’s life cycle.