An Investigation on Equity Incentive under the "Personal Shares" Mode Based on Event Study Approach

Equity incentive, evolving from the evolution of agency cost, property rights structure and corporate value theory, has become instrument in modern enterprise management. The current research of equity incentive is limited to motivating high-level professional managers, and there are very few corresponding studies on incentives for middle-level, low-level professional managers as well as grass roots. The equity incentive system under the "personal stock" mode is applicable to both high-level and low-level professional managers, even to core grass roots. Therefore, this paper analyzes the impact of equity incentive on performance and value of the corporation under the "personal shares" mode. The empirical results demonstrate that the "personal shares" equity incentive model can optimize the corporate structure, improve the labor efficiency of professional managers and grass roots, promote the company's capital accumulation, and attract and retain staffs.