Research On The Influence Of Executive Stock Incentive On Enterprise Value

In today’s economic and social context,the separation of the roles of enterprise owners and actual managers has led to the emergence of principal-agent problems,that is,the employees of enterprise management may put their own interests above the overall interests of the company,affecting the value of the enterprise.Equity incentive agreement is a key way to alleviate agency conflict,and it is also a direct recognition of the outstanding entrepreneurial talents of senior management.Because the executive equity incentive agreement usually links the enterprise performance with the management interests,the executive interests and shareholders’ rights and interests of enterprises that implement equity incentive tend to be consistent.Therefore,designing an appropriate equity incentive agreement can improve the principal-agent problem.Due to the differences between different experts and scholars in research direction and data selection,the academic community has not reached an agreement on the impact of executive equity incentives on enterprise value under different specific circumstances.Based on this,this paper takes the relevant theories of executive equity incentive and enterprise value as the research basis,collects and sorts out the data of China’s Shanghai and Shenzhen A-share listed companies from 2012 to 2020 as the research samples,and discusses the impact of equity incentive and its specific incentive agreement terms on the overall value of enterprises.The research finds that the implementation of executive equity incentive agreement can significantly induce enterprise value,and the average value of enterprises implementing executive equity incentive agreement is significantly higher than that of enterprises not implementing equity incentive;From the perspective of specific incentive agreement terms,the implementation of higher intensity equity incentive,stock option incentive mode,restricted stock incentive mode,and equity incentive agreement with a longer validity period can significantly improve the enterprise value,while the implementation of short-term equity incentive has not significantly affected the enterprise value.This paper demonstrates the robustness of the research conclusion by means of instrumental variable method,propensity score matching and other test methods.Finally,Further research shows that accrued earnings management and management expense ratio are the two key intermediary paths for executive equity incentives to induce enterprise value,which shows that executive equity incentives induce enterprise value by adopting more radical accrued earnings management and expanding business management activities.After summarizing the research results,this paper puts forward directional suggestions for better setting the specific text terms in the executive equity incentive contract.The research conclusion of this paper enriches the research on the economic consequences of executive equity incentives and specific incentive agreement terms,and also provides an incremental contribution to the literature in the field of influencing factors of enterprise value.