A Study On The Impact Of Elements Of Executive Equity Incentive Contracts On Corporate Performance In State-controlled Listed Companies

The 20 th Party Congress has put forward higher and clearer requirements for the reform of the mixed ownership system of state-owned enterprises,emphasising the promotion of state-owned capital and state-owned enterprises to make them bigger,better and stronger and to enhance their core competitiveness.As the most effective medium and long-term incentive for executives,equity incentive can effectively alleviate the principal-agent problem,strengthen the loyalty of executives to the enterprise,prevent them from making short-sighted behaviours,motivate them to give full play to their personal talents and fully stimulate their human capital advantages;at the same time,it can enhance their motivation to make innovative R&D decisions and promote their innovative activities to improve their core competitiveness.At the same time,it can enhance the motivation of executives to make innovative R&D decisions and promote their innovative activities to improve corporate performance.The contribution of equity incentives to corporate performance is only significant when the optimal contract is achieved for executive equity incentives.The setting of the different elements of the equity incentive contract has a very important impact on corporate performance.The scientific combination and arrangement of the contractual elements of equity incentives is the core of the effectiveness of equity incentives.Therefore,this paper takes the state-controlled listed companies as the research object,and examines the impact of different contractual elements of equity incentives on corporate performance from the micro-contractual elements of executive equity incentives.Firstly,it compares the domestic and international literature on equity incentives,defines the meaning and characteristics of equity incentives,the development history,the contractual elements and the measurement of corporate performance,based on property rights theory,principal-agent theory,full contract theory and human capital theory;secondly,combining principal-agent theory and full contract theory,it shifts the focus of the study to the micro level,and decomposes and refines the contractual elements of equity incentives.Then,we analyze the heterogeneous effects of the contractual elements of equity incentives on corporate performance by region,industry and degree of market competition.Finally,we systematically suggest the elements of executive equity incentive contracts for state-controlled listed companies at both the micro and macro levels,so as to provide reference and reference for the subsequent formulation of executive equity incentive plans for state-controlled listed companies.This paper empirically investigates the above theoretical analysis by using state-controlled enterprises listed on A-shares from 2012-2021 that have implemented equity incentives as a research sample.The main findings are as follows:(1)the type of equity incentive,incentive intensity and incentive conditions will have an incentive effect on executives,thus significantly improving corporate performance;(2)compared with restricted shares or appreciation rights,stock options have a better effect on improving corporate performance;(3)the stronger the equity incentive granted to executives,the more it will promote corporate performance;(4)the stricter the conditions set for executive equity incentive,the more it will promote corporate performance;(5)innovation investment and agency costs are more important to the improvement of corporate performance.(4)the stricter the conditions set for executive equity incentives,the more they promote corporate performance;(5)innovation investment and agency costs have a mediating effect between executive equity incentives and corporate performance.(6)Heterogeneity analysis of state-controlled listed companies is carried out according to region,industry and degree of market competition.In terms of region,the impact of the type of equity incentive on firm performance is significantly stronger in the eastern region than in the central and western regions,while the impact of the intensity of equity incentive on firm performance is significantly weaker in the eastern region than in the central and western regions.In terms of industry grouping: the type of equity incentive had no significant impact on the performance of firms in non-high-tech industries;the intensity of equity incentive had a significantly stronger impact on the performance of firms in high-tech industries than in non-high-tech industries.In terms of the grouping of product market competition: when the enterprises with strong product market competition implemented the executive equity incentive plan,the impact of the type of equity incentive and the intensity of equity incentive on the performance of enterprises with strong product market competition was significantly stronger than that of enterprises with weak product market competition.