An Analysis on the Equity Incentive of Listed Companies in China

The equity incentive of listed companies is still at the starting stage,and new problems and new situations have been emerging.In order to improve the validity of equity incentive,based on the principal-agent theory,the human capital theory,the transaction cost theory,the game theory and the mechanism design theory,the paper concludes that the major problems of listed companies in practicing the equity incentive are low incentive conditions,high incentive cost and high excising risk of incentive targets,and thus proposes that the equity incentive of listed companies should be perfected by improving the company governance structure and the relevant auxiliary law and regulations,constructing the manager market of listed companies,raising the effectiveness of capital markets and strengthening supervision over the equity incentive.