Mechanism And Effect Analysis Of Equity Incentive Factors Influencing Performance Of Listed Companies

Modern enterprise management rights detach from the owner’s rights leads to the emergence of the principal-agent problem,and equity incentives have been paid more and more attention and adopted by more and more enterprises as an effective means to solve this phenomenon.Changing the identity of the agent,on the one hand,enables the executives to give full play to their subjective initiative and realizes the convergence of the interests of the executives and the client,and on the other hand,enables the executives to form checks and balances on the major shareholders to avoid the hollowing out behavior of the latter one,thereby reducing double agency costs.Since the annoucement of 《Measures for the Administration of Equity Incentive of Listed Companies》,the equity incentive system has also been gradually improved and supplemented.The path of equity incentive affecting company performance and the intermediary role of dual agency cost are worth further study.So can listed company equity incentives promote the company’s performance? What is the internal influence mechanism and path? Do double agency costs play a mediating role? Does this effect have the same effect on enterprises of different natures? Equity incentive elements include incentive method,incentive intensity,incentive number,validity period,incentive price,etc.How are these elements related to company performance?So as to find the answers,this paper selects the data of 1586 A-share listed companies from2015 to 2020,a total of 9516 samples as the research object,uses these data to establish a panel regression model,and uses the “management shareholding-dual agency cost-corporate performance" path to test the mediating effect,and draw conclusions through robustness analysis and endogeneity test.The final empirical results show that:(1)the implementation of equity incentive plans can indeed significantly promote the improvement of company performance.Compared with state-owned enterprises,non-stateowned enterprises’ s implementation of equity incentives shows a more significant positive effect;(2)Regarding the mediating effect of double agency costs,management shareholding can significantly suppress the second type of agency cost,and the mediating effect of the second type of agency cost is significant;although management shareholding fails to significantly suppress the first type of agency cost,Sobel test proves that the mediating effect of the first type of agency cost is established.(3)The incentive method,the number of incentives and the exercise price in the equity incentive elements can also significantly and positively affect the performance of listed companies.The incentive intensity doesn’t show that the bigger the better,and the correlation between the validity period and the company’s performance is not significant.Based above results,appropriately increasing the shareholding ratio of management should be adopted in our country’s companies.They should formulate differentiated equity incentive policies according to their own scale,development stage,corporate strategy,etc.,so as to promote the company’s business development and the improvement of the capital market system.The main contribution of this paper is to deeply explore the internal mechanism of equity incentives and select five incentive elements to study their impact on company performance in detail,so as to provide suggestions for the high-quality development of Chinese enterprises.