An Empirical Study On Equity Incentives In Family Businesses And Firm Performance

Listed family enterprises are a special kind of listed enterprises which are controlled by individuals or families.They have been playing important roles in China’s capital market.However,compared with other listed enterprises,family enterprises often face a series of more severe challenges after being listed,among which internal governance is an important part.Facing the challenges,for family listed enterprises,the implementation of equity incentive can be regarded as a basic means to solve the internal contradictions of enterprises.Based on the above background,this paper mainly analyzes the implementation of post-listing equity incentives of domestic listed family enterprises through multiple linear regression analysis and event research methods.On the one hand,from the theoretical point of view,it supports and confirms the predecessors related theories on equity incentive,and at the same time,it enriches and improves the factors that affect the performance of listed family enterprises,and laid the foundation for quantifying the influence of family enterprises’ equity incentive theory.On the other hand,from the perspective of practice,it clarifies the influence mechanism of equity incentive on the performance of family enterprises,and verifies that the launch of equity incentive plan has a positive effect on the performance improvement and enterprise value of listed family enterprises in the short term.Based on the research results,the paper puts forward specific suggestions for domestic family listed enterprises and relevant government departments to implement equity incentive and gives suggestions for formulating equity incentive policies for listed companies.In terms of research ideas,this paper selects family-owned enterprises listed on the A-share market from2009 to 2018 to study the effect of changes in operating performance brought about by the implementation of equity incentives,while the enterprise performance can be divided into financial index performance and non-financial index performance according to two different dimensions.In this paper,multiple linear regression analysis was used to study the impact of equity incentives and various elements in the equity incentive plan on the financial performance of listed family enterprises,and the event study method was used to compare the abnormal returns of relevant listed companies before and after the announcement of the equity incentive draft,and analyze the value impact of the corresponding company.The results of the discussion would show that :(1)The implementation of equity incentives has the effect of improving the financial performance of listed family enterprises,and the more the number of implementations,the smaller the selection of restricted stocks rather than the stock option model and the smaller the proportion of shares granted within the validity period,the better the performance of the family business.(2)After the announcement of the draft equity incentive plan,the value of both listed family businesses and listed nonfamily businesses in China showed a general increase to a certain extent,but the event window for the cumulative abnormal returns of family businesses to be significantly positive was shorter,so It is concluded that the listed family enterprises have obvious equity incentive effect,and the time interval of the equity incentive effect is more concentrated than that of listed non-family enterprises.The innovation of this paper lies in that,first of all,it focuses on the listed family enterprises,which is closely related to the equity incentive mechanism.This paper explores the particularity of performance and stock price changes in family enterprises during the implementation of equity incentives,and also explores the different enhancement effects of equity incentive schemes of different types and elements in different types of family enterprises for enterprise performance.Secondly,from the perspective of decision makers of listed family enterprises,this paper investigates and selects whether equity incentive is implemented or not and various elements in the plan,which is different from the usual perspective of the incentivized person.In addition,starting from two different measurement dimensions of financial index and non-financial index,this paper uses multiple linear regression analysis and event study method to quantitatively measure the impact of equity incentive on financial index performance and non-financial index performance.In this way,we can have a more comprehensive understanding of all aspects of the implementation of equity incentive for listed family enterprises and deepen and three-dimensional understanding of the implementation of equity incentive plan for listed family enterprises.