Abstract

Whether equity incentive has the ability to enhance the value of the company has been be widely noted by the capital market. This study took 19 listed companies which were in the first batch of the implementation of equity incentive in 2006 as samples, used the event study methodology to study the short-term response in the market after the announcement of equity incentives, used the descriptive statistical analysis to test financial performance differences between before and after the equity incentive announcement and compared the short-term response and long-term financial performance. The study results show that, during the period in this study, the announcement of the equity incentive doesn’t produce significant changes on stock market and there is synchronization between the performance of the company and management equity incentive level, the shareholding ratio of the top ten, company size, but there is no significant correlation between the equity incentive and performance of the company.

Keywords:

Equity incentive, event study, financial performance,

References

Competing interests

The authors have no competing interests.

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Copyright

The authors have no competing interests.