The Impact of Large Shareholders Ownership on the Equity Incentive Effect——Based on the Explanation of Managerial Power

Through analysis on the intermediary role of managerial power on large shareholders and equity incentive,this paper has investigated the effect of the property of large shareholder ownership and shareholding ratio on equity incentive,and then has tested this effect with the panel data of Chinese listed companies during the period of 2007-2012 years.The theory and empirical results show that the increase in the proportion of state-owned shareholders will help to strengthen the effect of equity incentive,but the increase in the ownership of private shareholders will restrain the governance effect of equity incentive.The above research have significance on Chinese listed companies' incentive contract design,and the analysis on the economic outcome on account of managerial power provides a resolution to the rational allocation of management power in signing and performing contract.