Journal of Finance and Accounting

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The Analysis of Active Constraint of Equity Incentive in Listed Companies

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

DOI 10.11648/j.jfa.20150306.13
Published in Journal of Finance and Accounting (Volume 3, Issue 6, November 2015)
Page(s) 184-197
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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), 2024. Published by Science Publishing Group

Keywords

Listed Companies, Equity Incentive, Active Constraint

References
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Author Information
  • School of Business, Nantong University, Nantong, China

  • School of Computer Sciences, University of Toronto, Mississauga, Canada

  • School of Business, Nantong University, Nantong, China

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  • 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

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    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

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    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

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  • @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://download.sciencepg.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}
    }
    

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    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  - 

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