| It is of great importance for company to use equity incentive system to motivate staff enthusiasm, to improve the company competitiveness, to enhance the value of the company. However, if it is used wrongfully, it will hurt the interests of shareholders, especially the minority shareholders. With the increasing number of Listed Companies in China, the quality of listed companies is being questioned continuously, and new businesses are increasing. Therefore, it is very important to effectively improve the equity incentive system to improve the quality of listed companies. This paper uses ROA, ROE and Tobin’s Q value to measure company performance, and tries to demonstrate the impact of equity incentive on company performance in an all round way.The results show that the equity incentive can have a significant positive impact on the performance relevance, regardless of which aspect of the company’s performance is measured.In the course of the study, we also find that the scale of the company and the leverage of the company will also affect the degree of equity incentive effect on performance relevance. |
