Rationality of Key Designing Factors of Equities Incentive Plans

Under the condition of the separation between firm ownership and control in modern jointshare companies,equity incentive is a long-term motivation system which can resolve the agent problem caused by the different goals between the firm owners and managers. This paper selected China's listed companies which implemented equity incentive as samples,and used the SPSS16. 0 to conduct an empirical analysis of six design elements in the equity incentive plan. The results show that among six factors the initial price difference of incentive stock options,the restricted shares,and the conditions of exercising options have significant influences on the companies' performance,and therefore they are key incentive factors in equity incentive program design. But there is no statistical signifi-cance of the correlation between equity incentive period,proportion of incentive stock options and shares a reserved or not with the companies performance.