Empirical Study on Influencing Factors of Executive Equity Incentive Efficiency and Levels

Abstract

Using the dates come from 569 companies listed before 2006, we test the factors which affect the executive equity-based incentive levels and performance. The equity-based incentive performance is significant positive correlation with the levels of executive equity-based incentive. It shows equity-based incentive can improve company performance. When adding interaction variables in equation, we found the sensitivity for the company performance to levels of executive equity-based incentive would be affected by other factors. There are interactions between proportions in executive stock holding and market competition, risk level faced by the company, company scale and capital structure. And the efficiency of executive equity-based incentive is negative correlation with risk endured by the companies, proportions of independent directors and capital structure shows the internal and external governance structure of listed companies in China are still exist some problems. Keywords-equity incentive levels; equity incentive efficiency; influence factors; corporate governance