Dissertation > Excellent graduate degree dissertation topics show

The Research on the Nature of Equity Incentive Schemes of Chinese Listed Companies

Author: ZhuTingJin
Tutor: ZhuKangPing
School: Zhejiang University of Finance
Course: Accounting
Keywords: Equity Incentive Optimal Bond Management Power Theory Management Rent Extraction
CLC: F276.6
Type: Master's thesis
Year: 2012
Downloads: 80
Quote: 0
Read: Download Dissertation

Abstract


The separation of ownership and management poses the principal-agent problem. The optimal bond theory claims equity incentive is the best way to resolve the problem, while the management power theory claim the course the incentive plan is made is part of the problem, and the equity incentive is the way that the management extracts rents.The literature document:(1) Over all, the equity incentive schemes by Chinese listed corporate are recognized by investors, and arouse positive market response, which indicates the schemes mitigate the problem. (2) Independent directors do not protect the investors in the scheme. What’s worse, evidence indicates that the more independent directors in the board, the more negative the investors are to the scheme. The management power theory claim that the independent directors are substantively appointed by the management, so the independent directors are grateful to the management and will support management in management remuneration scheme. What’s more, if there are more independent directors in the board, the management can easily rationalize the remuneration scheme. The outrage can not deter management. There is no efficient reputation market in China, independent directors have no incentive to resist the management. The literature suggests the regulator of Chinese capital market should rethink the policy that request listed companies to maintain high ratio independent directors in the board. (3) Management of listed companies that operate high technology and emerging technology business extracts more rent than other listed companies. We believe asset specificity is the reason. The literature suggests the regulator should promulgate specific regulation to regulate the listed companies that operate high technology and emerging technology business in order to protect investors. (4) If the equity concentration is higher, the shareholders would monitor more closely the management in the making of equity incentive scheme, consequently the market will response more positively. (5)China Securities Regulatory Commission promulgates three regulations, which are memorandum 1 about the equity incentive, memorandum 2 about the equity incentive, memorandum 3 about the equity incentive. Our research finds out that the regulations are effective in protecting investors. In the institutional environment of China, the administrative regulation rather than best corporate governance is a more effective way to protect the investors. Although there are drawbacks in administrative regulation, it is the pragmatic way in China. Our research also document that the CSRC is not a tiger without teeth, which is reported by some medias. (6) Nature of ownership significantly matter in the response of market. The equity incentive plan of companies controlled privately arouses more positive response than state owned companies. We believe it is because of the lack of true owner in SOEs and the inner control. Although the shares that are held by the state make it have enough power to monitor the management, but they have no incentive to do so. The consequence of this is that the equity incentive scheme in fact become welfare schemes, and incentive nobody. That’s why the investors are indifferent to the schemes. We suggest the SOEs should be privatized. We conclude that the equity incentive schemes by Chinese listed companies have double natures that generally the schemes harmonies the benefits of management and shareholders, mitigate the principal-agent problem in Chinese listed companies, which is in accordance with the optimal bond theory; however we do notice evidence that the management extracts rent in the schems, which is in accordance with management power theory.

Related Dissertations

  1. Relationship management equity incentive , equity structure and corporate performance,F276.6;F224
  2. Empirical Study of Senior Management Compensation, Equity Incentive and Corporate Performance,F224
  3. Research on Equity Incentive Plans of Chinese Enterprises,F272.92
  4. Analysis of the Implementing Effect of Equity Incentive Mechanism and Its Influential Factors in China,F272
  5. Study on Incentive and Constrained Mechanisms of State-owned Enterprise Executive Based on Equity Incentive,F276.1
  6. Executive Equity Incentive and Firm Value,F272
  7. Empirical Study on the Effect of the Equity Incentive of Chinese Listed Companies,F276.6;F224
  8. Research on the Equity Incentive Utility in State-Controlled Listed Companies of Our Country,F272.92
  9. Equity incentive legal system of China 's listed companies,D912.29
  10. The Empirical Study of the Performance of Equity Incentive Mechanism,F224
  11. Dynamic Equity Incentive Model and Its Practice Mode,F224
  12. Equity Incentive Mechanism of Listed Companies in China,F279.2
  13. Influential Factors of Equity Incentive,F224
  14. An Empirical Analysis of the Relationship of Managerial Ownership Incentive and Performance of the Company,F272
  15. A Research on Executive Equity Incentive and Firm Value in High Technology Company,F272
  16. The Empirical Research on Timing and Effects of the Equity Incentive Plans,F271
  17. The Factors of That Affect Listed Company Equity Incentive (LCEI) and the Effects of Incentive,F224
  18. The financial restatement Research in the financing needs with equity incentive motivation,F832.51;F224
  19. The Research on the Protection of Stakeholders in Equity Incentive of Listed Company,D922.291.91
  20. Research on Internal Control Self-Assessment of Equity Incentives of Listed Companies’ Executives in China,F272.92

CLC: > Economic > Economic planning and management > Enterprise economy > A variety of enterprise and economic > Company
© 2012 www.DissertationTopic.Net  Mobile