Abstract
As a long-term compensation incentive, equity incentive can effectively solve the principal-agent problem, reducing managers' short-sighted behavior, improving the management efficiency of enterprises, thereby enhancing the performance of enterprises, and thus known as the "golden handcuffs" of enterprise incentive. One of the reasons that equity incentive is favored in listed companies is that it can curb the brain drain, namely the active constraint of equity incentive. But in recent years, the executive resign phenomenon has been more and more common in listed companies. For company executives and the core talented persons, the once “golden handcuffs” now turns into an elusive fantasy. A large number of executives who were once encouraged by the equity incentive are leaving their posts. The active constraint of equity incentive has not achieved the anticipated level. On the basis of the brief introduction to related concepts of the active constraint of equity incentive, this paper, which used the listed companies as the object of the study, selects 30 equity incentive plans which have a good active constraint of equity incentive to illustrate the present situation of the active constraint of equity incentive plan. After that, this paper selects 57 equity incentive plans which deadlines are 2012.12.31 and expounds three factors which affect the active constraint of equity incentive through the empirical method, then proposes three targeted improvement recommendations: improve the new share pricing system, design an effective equity incentive plan and improve relevant laws and regulations.
Highlights
Equity incentive is a long - term compensation incentive
The performance evaluation index of listing companies are net profit rate, net profit growth rate and other financial index, on the one hand, these indicators are biased in the short term, they will make the incentive object to focus on short-term financial results, and generate speculation, the long-term incentive to deviate from the equity incentive plan, on the other hand, these indicators do not consider the impact of macroeconomic fluctuations on the equity incentive effect
We can draw the conclusion from Table 9: 1 The issue price of coefficient C (2) is positive and P value is less than 5%, it means that the coefficient in the 5% significance level significantly, and incentive objects are positively related to turnover, indicating that the higher issuing price of listed companies, incentive objects turnover probability is low, activating constraint effect of the equity incentive is better, so that shares of listed companies and the issue price of equity incentive of activating constraint effect have negatively correlated
Summary
Through giving certain amounts of shares in the form of economic rights to directors, supervisors, senior management personnel, backbone employees and other personnel, making the actuator participate in the company decision-making, share the profits, take risks as shareholders, thereby carrying out their duties diligently for the long - term development of the enterprise, eventually improving the operating performance of enterprise's salary incentive system for a long time. Equity incentive link up operators and shareholders' long - term interests together, and form a community based on interests, making the enterprise operators work for shareholders, and work for themselves, so as to reduce the operator's short - sighted behavior, prompt managers to consider the long - term development of the enterprise. Under the equity incentive system, the company shareholders tend to authorize the board of directors on behalf of shareholders to sign the relevant agreement with incentive objects (including operators, enterprise's key employees, etc.). Cui Zhe et al.: The Analysis of Active Constraint of Equity Incentive in Listed Companies
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