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Abstract：Equity incentive is an effective long-term incentive mechanism， which fundamentally links the individual interests of the managers with the overall interests of the company through stock rights. Through the analysis we can find that The implementation of equity incentive by listed companies can improve the performance of the company， and the proportion of equity incentive is positively correlated with the company's performance. Moreover， Compared with the long equity incentive period， the short has a better effect on the performance of the company.
Key Words： Listed company； Equity incentive； Company Performance
1.Introduction
As an important part of incentive mechanism， equity incentive is related to the long-term development of enterprises. How to improve the economic efficiency through the equity incentive system has always been the focus of research in the field of practiceand theory. The practice circle optimizes the equity incentive mechanism from the macro level of legal system and market environment， so as to lay a foundation for perfecting the R&D investment system and improving operating performance.
2. Analysison the Impact of Firm Performance made by the Equity Incentive
The equity incentive mechanism， which has been widely applied into practice in western countries， has shown great superiority in many fields including resolving the principal-agent problem， improving operation performance and attracting great employees. With the completion of the split share reform and the introduction of the Equity Incentive Measures for Listed Companies in 2016， the equity incentive system has the market of the rapid development and institutional basis， so it can be predicted that the influence of the system in modern enterprises will increase day by day.
With the continuous development of China's economy and the improvement of the legal policy environment， more and more listed companies are attracted by the interests of equity incentive， joining the army of equity incentive. By the end of December 2017， a total of 396 a-share listed companies had announced their equity incentive plans， and the market size has increased by more than 60% compared with the same period in 2016. At this point， China's equity incentive mechanism has entered a stage of rapid development.
Scholars at home and aboard have been doing a lot of research on the issue of management equity incentive， making abundant achievements， which are reflected in the relevance of equity incentive and enterprise performance. But the research conclusions on this problem are not exactly consistent. In 1932，Berle and Means first analyzed the separation of ownership and management of enterprises. They believed that the implementation of the equity incentive to management could effectively improve the performance of the company， and there was a positive correlation between them. They also pointed out that the way that management hold shares could effectively reduce the agency cost of the enterprise.
In 1999， based on the research on the relationship between equity incentive and corporate performance， Jensen measured the effect of the equity incentive by executive stockholding， finding that when managers hold a higher proportion of shares， the interests of management and shareholders are more consistent， which is conducive to alleviating agency conflicts and maximizing enterprise value.
1983， Fama and Jensen put forward "managersdefense hypothesis". They held the opinion that if the equity that managers have increase， the ownership will raised accordingly， then they will have more power to control the whole enterprise， which may result in the management personnel taking the shares of other investors as their own， so as to increase their own value. But that would reduce the value of the enterprise.
In 2004，Akimova studied the data of two hundred companies in Ukraine for three years and found that the shareholding of senior executives was positively correlated with corporate performance， but when the proportion reached a certain level， they showed a negative relationship.
In combination with the Principal-agent Theory， the Theory of Human Capital and the Convergence Hypothesis， wecan know that if the right of enterprise management is separated from the right of ownership and lack of symmetric information， the principal-agent problem will arise. At this time， the acquisition of equity by the managers enables them to have the similar objective function with the shareholders， which reduces the agency cost of the company and promotes the operation of the company to a certain extent. In the concrete practice in China， the proportion of equity incentive is small， so the managers cannot control the company through equity incentive. The equity incentive mechanism can promote the operation of the company in a way， and the specific proportion will make this promotion effect different. Therefore， it is assumed that the company's performance is influenced by equity incentive.
As a long-term mechanism， equity incentive has a certain time lag in the working process. The validity of equity incentive is an important element of its scheme design， and the difference of validity may lead to the different implementation effect. In theory， if the equity incentive has a long period of validity， the managers would work hard in order to obtain the corresponding income， so as to guarantee the improvement of long-term development ability of the company. However， in practice， besides the influence of managers' decision， the performance of company is affected by many objective factors. Once these objective uncertainties affect the performance of the company， the managers may not reach the performance conditions of the feasible right. Therefore， managers may choose short-term interests， so the implementation effect of equity incentive will be greatly weakened.
3. Conclusion
For the reasons above， conclusions can be drawn that the implementation of equityincentive by listed companies can improve the enterprise performance. And compared with the long equity incentive period， the short has a better effect on the performance of the company.
Works Cited：
Jensen M C，Meckling W H. Theory of the firm： Managerial behavior， agency costs and ownership structure. Journal of Financial Economics， 1976 （4）. 305-360
Akimova. Managerial Ownership and Firm Valuation Evidence from Japanese Firms.Pacific-Basin Finance Journal， 2004.
Jensen Michael C，Kevin J Murphy. Performance Pay and Top management Incentives. Journal of Political Economy， 1990.
Introduction：
Tanyizhou（1996-）， female， Shaodong County， Shaoyang City， Nan Province， Master， Accountancy， Chang 'an University.
Key Words： Listed company； Equity incentive； Company Performance
1.Introduction
As an important part of incentive mechanism， equity incentive is related to the long-term development of enterprises. How to improve the economic efficiency through the equity incentive system has always been the focus of research in the field of practiceand theory. The practice circle optimizes the equity incentive mechanism from the macro level of legal system and market environment， so as to lay a foundation for perfecting the R&D investment system and improving operating performance.
2. Analysison the Impact of Firm Performance made by the Equity Incentive
The equity incentive mechanism， which has been widely applied into practice in western countries， has shown great superiority in many fields including resolving the principal-agent problem， improving operation performance and attracting great employees. With the completion of the split share reform and the introduction of the Equity Incentive Measures for Listed Companies in 2016， the equity incentive system has the market of the rapid development and institutional basis， so it can be predicted that the influence of the system in modern enterprises will increase day by day.
With the continuous development of China's economy and the improvement of the legal policy environment， more and more listed companies are attracted by the interests of equity incentive， joining the army of equity incentive. By the end of December 2017， a total of 396 a-share listed companies had announced their equity incentive plans， and the market size has increased by more than 60% compared with the same period in 2016. At this point， China's equity incentive mechanism has entered a stage of rapid development.
Scholars at home and aboard have been doing a lot of research on the issue of management equity incentive， making abundant achievements， which are reflected in the relevance of equity incentive and enterprise performance. But the research conclusions on this problem are not exactly consistent. In 1932，Berle and Means first analyzed the separation of ownership and management of enterprises. They believed that the implementation of the equity incentive to management could effectively improve the performance of the company， and there was a positive correlation between them. They also pointed out that the way that management hold shares could effectively reduce the agency cost of the enterprise.
In 1999， based on the research on the relationship between equity incentive and corporate performance， Jensen measured the effect of the equity incentive by executive stockholding， finding that when managers hold a higher proportion of shares， the interests of management and shareholders are more consistent， which is conducive to alleviating agency conflicts and maximizing enterprise value.
1983， Fama and Jensen put forward "managersdefense hypothesis". They held the opinion that if the equity that managers have increase， the ownership will raised accordingly， then they will have more power to control the whole enterprise， which may result in the management personnel taking the shares of other investors as their own， so as to increase their own value. But that would reduce the value of the enterprise.
In 2004，Akimova studied the data of two hundred companies in Ukraine for three years and found that the shareholding of senior executives was positively correlated with corporate performance， but when the proportion reached a certain level， they showed a negative relationship.
In combination with the Principal-agent Theory， the Theory of Human Capital and the Convergence Hypothesis， wecan know that if the right of enterprise management is separated from the right of ownership and lack of symmetric information， the principal-agent problem will arise. At this time， the acquisition of equity by the managers enables them to have the similar objective function with the shareholders， which reduces the agency cost of the company and promotes the operation of the company to a certain extent. In the concrete practice in China， the proportion of equity incentive is small， so the managers cannot control the company through equity incentive. The equity incentive mechanism can promote the operation of the company in a way， and the specific proportion will make this promotion effect different. Therefore， it is assumed that the company's performance is influenced by equity incentive.
As a long-term mechanism， equity incentive has a certain time lag in the working process. The validity of equity incentive is an important element of its scheme design， and the difference of validity may lead to the different implementation effect. In theory， if the equity incentive has a long period of validity， the managers would work hard in order to obtain the corresponding income， so as to guarantee the improvement of long-term development ability of the company. However， in practice， besides the influence of managers' decision， the performance of company is affected by many objective factors. Once these objective uncertainties affect the performance of the company， the managers may not reach the performance conditions of the feasible right. Therefore， managers may choose short-term interests， so the implementation effect of equity incentive will be greatly weakened.
3. Conclusion
For the reasons above， conclusions can be drawn that the implementation of equityincentive by listed companies can improve the enterprise performance. And compared with the long equity incentive period， the short has a better effect on the performance of the company.
Works Cited：
Jensen M C，Meckling W H. Theory of the firm： Managerial behavior， agency costs and ownership structure. Journal of Financial Economics， 1976 （4）. 305-360
Akimova. Managerial Ownership and Firm Valuation Evidence from Japanese Firms.Pacific-Basin Finance Journal， 2004.
Jensen Michael C，Kevin J Murphy. Performance Pay and Top management Incentives. Journal of Political Economy， 1990.
Introduction：
Tanyizhou（1996-）， female， Shaodong County， Shaoyang City， Nan Province， Master， Accountancy， Chang 'an University.