The Analysis of Active Constraint of Equity Incentive in Listed Companies

Cui Zhe; Yang Jinpei; Wang Binru

doi:doi:10.11648/j.jfa.20150306.13

| Peer-Reviewed

The Analysis of Active Constraint of Equity Incentive in Listed Companies

Cui Zhe, Yang Jinpei, Wang Binru

Published in Journal of Finance and Accounting (Volume 3, Issue 6)

Received: 14 September 2015 Accepted: 30 September 2015 Published: 16 October 2015

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

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.

Published in	Journal of Finance and Accounting (Volume 3, Issue 6)
DOI	10.11648/j.jfa.20150306.13
Page(s)	184-197
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Listed Companies, Equity Incentive, Active Constraint

References

[1]	Wu Shuchun, Zhu Xu. Elementary Analysis of Equity Incentive of Listed Companies [J]. China Collective Economy, 2012, (1): 106-107.
[2]	Lin Danfeng. Analysis and Improvement Measures of Equity Incentive’s Status Quo of Chinese SMEs Board and GEM Board [J]. Modern Commerce, 2012, (1): 146.
[3]	Peng Jianqiang. Elementary Analysis of Equity Incentive of Listed Companies [J]. Market Forum, 2011, (8):150-151.
[4]	Wei Gang. Incentive to Senior Management and Performance of Listed Companies [J]. Economic Research, 2000, (3): 32-39.
[5]	Song Zengji, Zhang Zongyi. Empirical Research of Shares Structure of Listed Companies and Companies’ Performance [J]. Quantitative & Technical Economics, 2003, (1): 128-132.
[6]	Gu Bin, Zhou Liye. The Research of Implementation Effect of Chinese Listed Companies’ Equity Incentive [J]. Accounting Research, 2007, (2): 79-84.
[7]	Wu Shukun. The Research of U-relationship of Shares Structure and Performance—Empirical Research of Listed Companies from 1997~2000 [J]. China Industrial Economics, 2002, (1): 80-87.
[8]	Song Zengji, Zhang Zongyi, Zhu Jian. The Research of Influence of Operators' Equity Incentives in Listed Companies [J]. Management Review, 2005, (3): 3-8.
[9]	Chen Yong, Liao Guanming, Wng Ting. The Empirical Research of China’s Equity Incentives in Listed Companies [J]. Management World, 2005, (2): 158-159.
[10]	Yuan Yan, Yu Haiying. The Research of Relationship of Equity Incentive and Performance Based on Listed Companies’ Practical Data [J]. Contemporary Economics, 2007, (6): 12-13.
[11]	Li Yuxiang, Liu Dongxin. Elementary Analysis of Status Quo of Listed Companies’ Equity Incentive [J]. Accounting Weft, 2009, (5): 98-100.
[12]	Song Zengji, Zhang Zongyi. Empirical Research of Shares hold by Managers in Listed Companies and the Performance [J]. Journal of Chongqing University (Social Science Edition), 2008, (6): 1-2.
[13]	Cheng Longyun, Yue Chunmiao. The Empirical Research of Equity Incentive’s Performance of Senior Management Levels in Listed Companies [J].Research on Economics and Management, 2008, (5): 5-6.
[14]	Zhang Liang, Mao Daowei, Yan Lei. The Research of Influencing Factors of Equity Incentive’s Intensity and Structure in Listed Companies [J].Social Science Research, 2010, (4): 48-53.
[15]	Wang Qiuxia, Chen Xiaoyi. The Empirical Research of Economic Performance of Chinese Companies’ Equity Incentive [J]. Market Forum, 2007, (8): 56-58.
[16]	Liu Hua, Zhen Jun. Equity Incentive and Performance of High-tech Listed Companies—Based on the Angle of Independent Innovations [J]. Friends of Accounting, 2010, (12): 67-70.
[17]	Zhou Jianbo, Sun Jusheng. The Research of Governance Effect of Operators' Equity Incentives—Experience and Evidence comes from Chinese Listed Companies [J]. Economic Research, 2003, (5): 74-82.
[18]	Yang Hua, Chen Xiaosheng. Theory, Regulation and Practice of Equity Incentive [M].Beijing: China Economic Publishing House, 2008, 3-50.
[19]	Chen Qingtai, Wu Jinglian. The Empirical Research of Stock Option [M]. Beijing: China Financial and Economic Publishing House, 2001, 271-275.
[20]	Ye Yonggang, Lai Xiaoyan, Huang Zhuoli. Stock Option [M].Wuhan, Hubei Province: Wuhan University Press, 2000, 1-3.
[21]	Jensen, M. and Meckling, W. Theory of Firm: Managerial Behavior, Agency Costs and Ownership Structure [J]. Journal of Financial Economics, 1976, (3): 305-360.
[22]	Demsetz HK. The Structure of Corporate Ownership: Causes and Consequences [J]. Journal of Political Economy, 1985, (6): 1155-1177.
[23]	Mork. R., Andrci Shlerfer, and Rober W. Vishny. Management Ownership and Market Valuation: An Empirical Analysis [J]. Journal of Financial Economics, 1988, 20(1): 293-317.
[24]	KoIe S R. Measuring manageriaI eguity ownership: A comparison of sources of ownership data [J]. JournaI of Corporate Finance, 1995, (1): 413-435.
[25]	Short H, Keasey K. ManageriaI ownership and the performance of firms: Evidence from the UK [J]. JournaI of Corporate Finance, 1999, (5): 79 - 101.
[26]	Murphy, Kevin J.. Performance Pay and Top—Management Incentives [J]. Journal of Political Economy, 1990, (1): 37 - 49.

Cite This Article

Plain Text BibTeX RIS

APA Style

Cui Zhe, Yang Jinpei, Wang Binru. (2015). The Analysis of Active Constraint of Equity Incentive in Listed Companies. Journal of Finance and Accounting, 3(6), 184-197. https://doi.org/10.11648/j.jfa.20150306.13

Copy | Download

ACS Style

Cui Zhe; Yang Jinpei; Wang Binru. The Analysis of Active Constraint of Equity Incentive in Listed Companies. J. Finance Account. 2015, 3(6), 184-197. doi: 10.11648/j.jfa.20150306.13

Copy | Download

AMA Style

Cui Zhe, Yang Jinpei, Wang Binru. The Analysis of Active Constraint of Equity Incentive in Listed Companies. J Finance Account. 2015;3(6):184-197. doi: 10.11648/j.jfa.20150306.13

Copy | Download

@article{10.11648/j.jfa.20150306.13,
  author = {Cui Zhe and Yang Jinpei and Wang Binru},
  title = {The Analysis of Active Constraint of Equity Incentive in Listed Companies},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {6},
  pages = {184-197},
  doi = {10.11648/j.jfa.20150306.13},
  url = {https://doi.org/10.11648/j.jfa.20150306.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150306.13},
  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.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Analysis of Active Constraint of Equity Incentive in Listed Companies
AU  - Cui Zhe
AU  - Yang Jinpei
AU  - Wang Binru
Y1  - 2015/10/16
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150306.13
DO  - 10.11648/j.jfa.20150306.13
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 184
EP  - 197
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150306.13
AB  - 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.
VL  - 3
IS  - 6
ER  -

Copy | Download

Author Information

Cui Zhe

School of Business, Nantong University, Nantong, China
Yang Jinpei

School of Computer Sciences, University of Toronto, Mississauga, Canada
Wang Binru

School of Business, Nantong University, Nantong, China

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Cui Zhe, Yang Jinpei, Wang Binru. (2015). The Analysis of Active Constraint of Equity Incentive in Listed Companies. Journal of Finance and Accounting, 3(6), 184-197. https://doi.org/10.11648/j.jfa.20150306.13

Copy | Download

ACS Style

Cui Zhe; Yang Jinpei; Wang Binru. The Analysis of Active Constraint of Equity Incentive in Listed Companies. J. Finance Account. 2015, 3(6), 184-197. doi: 10.11648/j.jfa.20150306.13

Copy | Download

AMA Style

Cui Zhe, Yang Jinpei, Wang Binru. The Analysis of Active Constraint of Equity Incentive in Listed Companies. J Finance Account. 2015;3(6):184-197. doi: 10.11648/j.jfa.20150306.13

Copy | Download

@article{10.11648/j.jfa.20150306.13,
  author = {Cui Zhe and Yang Jinpei and Wang Binru},
  title = {The Analysis of Active Constraint of Equity Incentive in Listed Companies},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {6},
  pages = {184-197},
  doi = {10.11648/j.jfa.20150306.13},
  url = {https://doi.org/10.11648/j.jfa.20150306.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150306.13},
  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.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Analysis of Active Constraint of Equity Incentive in Listed Companies
AU  - Cui Zhe
AU  - Yang Jinpei
AU  - Wang Binru
Y1  - 2015/10/16
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150306.13
DO  - 10.11648/j.jfa.20150306.13
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 184
EP  - 197
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150306.13
AB  - 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.
VL  - 3
IS  - 6
ER  -

Copy | Download