Research On The Impact Of Employee Equity Incentives On The Company’s Stock Price Crash Risk

China’s securities market has taken several serious market chaos in the past decade.This has caused huge damage to the company’s development and investor interests.Therefore,the stock price collapse has obtained the attention of many scholars.In addition,the Securities Regulatory Commission issued a notice requested that the listed companies in conjunction with their own circumstances,including policies,including employee equity incentives.This paper studies the impact of employee equity incentives for the risk of the company’s share price,in order to improve the employeal equity incentives,norms of the listed company,and promote the health development of securities markets.This paper uses Chinese A-share listed companies from 2009 to 2020 as a sample to study the impact of employee equity incentives on the stock price crash risk of listed companies.The conclusion of this paper is obtained by using the instrumental variable method.First of all,unlike executive equity incentives,employee equity incentives can significantly reduce the company’s stock price crash risk.The reason for the above situation is mainly due to the different attitudes of employees and executives towards earnings management.Next,considering that ordinary employees can also obtain company information and disseminate information on informal platforms,it will affect the company’s stock price crash risk.This paper tests the robustness of the main regression by introducing the proportion of ordinary employees to the total number of employees as a control variable.The regression results show that the negative impact of employee equity incentives on the company’s stock price crash risk is still significant at the 1% level,while the impact of ordinary employees is not significant.This further supports the conclusion of this paper.Moreover,due to the different nature of enterprises,the impact of employee equity incentives on the company’s stock price crash risk is more obvious in non-state-owned enterprises.Finally,this paper finds that the impact of employee equity incentives on the company’s stock price crash risk is significantly different between different industries.Only in the high-tech industry the significance of the influence is shown.The reason for the industry gap is that the industries have different development conditions and characteristics of the industry itself.Based on the experimental results,this paper proposes the following suggestions.Firstly,continue to improve the formulation and implementation of employee equity incentive plans.Secondly,state-owned enterprises should look for more effective incentives than equity incentives to mobilize the enthusiasm of employees.Thirdly,each industry should formulate employee equity incentive plans differently based on its own industry development status and characteristics.Finally,the regulatory authorities of enterprises should strengthen the supervision and management of equity incentive objects.