我国上市公司高管股权激励计划现状外文翻译(可编辑)

1、我国上市公司高管股权激励计划现状外文翻译 shandong外文翻译soe execs get ready for stock incentivestan weistock option incentive plan will soon be available to state-owned enterprise executives but will it lead to greater prosperity or new problems a trailblazing new scheme to infuse state-owned enterprises soes with incenti

2、ve stock options is under way its a plan that may bolster company performance but its not without riskson august 15 li rongrong minister of the state-owned assets supervision and administration commission sasac disclosed that after careful study a stock option incentive trial plan will be carried ou

3、t in the listed soes according to the trial plan about 102 a-share listed soes are expected to be the trial companies the short list of some of those expecting to participate includes china unicom citic group kweichow moutai china merchants bank and beijing financial street holding co stock option i

4、ncentive plan is designed to entice executives to work hard for the long - term development of their companies as stocks rise based on company performance they too gain through this profits haring arrangement this kind of incentive plan is popular in foreign countries especially in the united states

5、 where stock options can account for as high as 70 percent of a ceos income further many economists believe the stock option incentive plan optimizes corporate governance structure improve management efficiency and enhance corporate competitiveness on the other hand after the measure s on the admini

6、stration of stock incentive plans of listed companies was issued early this ye a r some of the companies turned out to have misused the incentive stock options the result was insider dealings performance manipulation as well as a manipulation of the company stock price although the stock option ince

7、ntive scheme is a frequently used tool to encourage top management it could also be a double - edged sword especially in an immature market economy li said the sasac is therefore taking a cautious approach placing explicit requirements on corporate governance the target and extent of the incentive m

8、easures li added li stated that the overseas-listed soes would be the first few companies that will implement the mechanism because of their sound management structure and law-abiding nature then the domestic listed soes will have the chance to embrace incentive stock options which would be promoted

9、 if the trial results were good executive face-liftas for more than 900 listed soes the personnel structure of the boards of directors will pro b ably face substantial change thats because the plan states that if the s t o ck option incentive mechanism is going to be implemented in listed soes exter

10、nal directors should account for half of the board of directors the trial plan introduced the concept of external directors for the first time the external director should be legally recommended by directors of listed soes and should not be working in the listed soes or in a holding company said the

11、 plan however currently most of boards of directors of listed soes are not in compliance with the requirement they have to readjust the structure of board of directors to fit in with the new mechanism for most of the soes which are listed in the a-share market their boards of directors are made up o

12、f non-external directors and independent directors which means that apart from independent directors members of board of directors are all working for the listed company or for the large shareholder said zhu yongmin an economist with the central university of finance and economics if the stock optio

13、n incentive mechanism is to be carried out in those companies a large-scale restructuring of board of directors is unavoidable and external directors must be introduced into the board china securities regulatory commission csrc stipulates that an independent director is one who doesnt hold another o

14、ffice beyond his job as a director and has no such relations with major share holder that would interfere with the exercise of independent and objective judgment currently the independent directors of listed companies can be categorized as external directors zhu said however the definition of extern

15、al director is much broader than independent director those who work for a company which has business ties with a listed company though they do not meet the requirements of being an independent director but can be considered an external directoradditionally the trial plan also stipulates that the sa

16、lary committee of listed soes that exercise the stock option incentive mechanism should be composed of external directors however for most of the listed companies there are still non - external directors as a result a considerable number of listed soes need to transform their salary committee to ful

17、fill the prerequisites of the stock option incentive mechanism avoiding over-compensationover- compensation is something that the trial stock plan is trying to avoid as well therefore the trial plan states that domestic listed soes executives should receive no more than 30 percent of their total sal

18、ary including options and dividends but as for the overseas-listed soes the imum incentive is 40 percent of the target salary the trial plan also fixes the volume of incentive stock options the trial plan states that the volume of incentive stock options should be fixed in accordance with the scale

19、of the listed company and the number of incentive objectives the number of share allocated may not exceed 10 percent of the companys total share capital and no less than 01 percent in fact beijing review was informed by the csrc that some 20 listed soes also began exploring stock option incentive sc

20、hemes in the first half of this year but none of them received approval from the csrc because their schemes revealed sharp contrast with the trial plan in terms of the scale of incentive stock options offered results-orientedunder the trial plan better performance is a must to obtain stock privilege

21、s the number of incentive stock options that senior executives in listed soes can get depends on their annual performance if they cannot fulfill the targeted objective s the listed company may have the right to take back the incentive the stock options or purchase them back at the price at which the

22、y we re sold to the executives zhu yongmin noted that the stock option incentive plan is not invariable the directors of listed companies senior executives and core technological and management personnel may not get the target stock options if they fail to achieve a satisfactory performance no freeb

23、iesfor sure state stocks wont be given to executives for free under the trial plan the state stocks have prices zheng said if they we re paid to senior executives for free in the name of incentive stocks it is equal to a loss of state assets to elaborate the incentive stocks should be the increment

24、of stocks that are earned by the executives for listed soes after the implementation of the trial plan and should not be previous stock inventory in short the past is past only future stock increases can be used as incentive stocks further the incentive stocks should not be paid only by the sasac wh

25、ich is the largest shareholder of all the central soes said zheng peimin chairman of shanghai realize investment consulting co who took part in drafting the trial plan the incentive plan should be a joint action of all share holders of a company and they should shoulder the same responsibility and e

26、njoy equal benefit already share holders pay for salaries of directors senior executives and technology management staff the incentive stocks should also be paid by all shareholders zheng said for instance if the government or a state owned enterprise holds 60 percent of a listed soe they should onl

27、y pay 60 percent of the incentive stocks and 40 percent should be paid by other share holders investor pricing of ceo equity incentivesjeff p boone inder k khurana k k ramanabstractthe main purpose of this paper is to explore ceo compensation in the form of stock and optionsthe objective of ceo comp

28、ensation is to better align ceo-shareholder interests by inducing ceos to make more optimal albeit risky investment decisions however recent research suggests that these incentives have a significant down-side ie they motivate executives to manipulate reported earnings and lower information quality

29、given the conflict between the positive ceo-shareholder incentive alignment effect and the dysfunctional information quality effect it is an open empirical question whether ceo equity incentives increase firm value we examine whether ceo equity incentives are priced in the firm-specific ex ante equi

30、ty risk premium over the 19922007 time period our analysis controls for two potential structural changes over this time period the first is the 1995 delaware supreme court ruling which increased protection from takeovers and decreased risk for delaware incorporated firms the second is the 2002 sarba

31、nesoxley act which impacted corporate risk taking equity incentives and earnings management collectively our findings suggest that ceo equity incentives despite being associated with lower information quality increase firm value through a cost of equity capital channel keywordsceo equity incentivesi

32、nformation qualitycost of equity capital introduction in this study we investigate investor pricing of ceo equity incentives for a large sample of us firms over the period 19922007because incentives embedded in ceo compensation contracts may be expected to influence policy choices at the firm level

33、our objective is to examine whether ceo equity incentives influence firm value through a cost of equity capital channelprior research eg jensen et al 2004 jensen and murphy 1990 suggests that equity- based compensation ie ceo compensation in the form of stock and options provides the ceo a powerful

34、inducement to take actions to increase shareholder value by investing in more risky but positive net present value projects put differently equity incentives are expected to help mitigate agency costs by aligning the interests of the ceo with those of the shareholders and otherwise help communicate

35、to investors the important idea that the firms objective is to imize shareholder wealth hall and murphy 2003 however recent research contends that equity incentives also have a perverse or dysfunctional downside in particular equity-based compensation makes managers more sensitive to the firms stock

36、 price and increases their incentive to manipulate reported earningsie to create the appearance of meeting or beating earnings benchmarks such as analysts forecasts in an attempt to bolster the stock price and their personal wealth invested in the firms stock and options bergstresser and philippon 2

37、006 burns and kedia 2006 cheng and warfield 2005 stated in another way ceo equity incentives can have an adverse effect on the quality of reported accounting information as noted by bebchuk and fried 2003 and jensen et al 2004 by promoting perverse financial reporting incentives and lowering the qua

38、lity of accounting information equity-based compensation can be a source of rather than a solution for the agency problem despite these arguments about the putative ill effects of equity incentives equity-based compensation continues to be a salient component of the total pay packages for ceos still

39、 given the conflict between the positive incentive alignment effect and the dysfunctional effect of lower information quality it is an open empirical question whether ceo equity incentives increase firm value to our knowledge prior research provides mixed evidence on this issue for example mehran 19

40、95 examines 19791980 compensation data and finds that equity-based compensation is positively related to the firms tobins q by contrast aboody 1996 examines compensation data for a sample of firms for years 1980 through 1990 and finds a negative correlation between the value of outstanding options a

41、nd the firms share price suggesting that the dilution effect dominates the options incentive alignment effect moreover both these studies are based on dated ie pre-1991 data in our study we examine whether ceo equity incentives are related to the firm-specific ex ante equity risk premium ie the exce

42、ss of the firms ex ante cost of equity capital over the risk-free interest rate a metric discussed by dhaliwal et al 2006 consistent with core and guay 2002 we measure ceo equity incentives as the sensitivity of the ceos stock and option portfolio to a 1 percent change in the stock price based on a

43、sample of 16502 firm-year observations over a 16 year period 19922007 we find ceo equity incentives to be negatively related to the firms ex ante equity risk premium suggesting that the positive incentive alignment effect dominates the dysfunctional effect of lower information quality in other analy

44、sis we attempt to control for two regulatory structural changes that occurred during the 19922007 time period of our studyas pointed out by daines 2001 regulatory changes can have an impact on firm values and returns as well as the structure of executive compensation first low 2009 finds that follow

45、ing the 95 delaware supreme court ruling that resulted in greater takeover protection managers reduced firm risk by turning down risk-increasing albeit positive npv projects in response firms increased ceo equity incentives to mitigate the risk aversion potentially the impact of the delaware ruling

46、on managers risk aversion and the follow-up increase in equity incentives to mitigate the increase in managers risk aversion following the ruling may have resulted in a structural change in our sample at least for firms incorporated in delaware to control for this potential structural impact we perf

47、orm our analysis for delaware incorporated firms for 19962007 separately our results suggest that the favorable effect of ceo equity incentives on firm value as reflected in the lower ex ante equity risk premium is similar for delaware firms and other firmssecond a number of studies eg cohen et al 2

48、007 2008 li et al 2008 indicate that the 2002 sarbanesoxley act sox lowered equity incentives ie reduced the proportion of equity incentives to total compensation post-sox reduced managerial risk taking decreased spending on rd and capital expenditures and reduced accruals-based earnings management

49、while increasing real earnings management since real earnings management is potentially more difficult for investors to detect than accruals-based earnings management a possible consequence of sox could be an increase in agency costs since 2002 to control for the potential structural changes imposed

50、 by sox both in terms of expected returns and the level of equity incentives we perform our analysis for the pre-sox and post-sox time periods separately for each of the two time periods our results suggest a favorable effect of ceo equity incentives on firm value as reflected in the lower ex ante e

51、quity risk premium although the effect appears to be stronger in the post-sox periodour study contributes to the literature on the valuation of equity incentives we provide to our knowledge first-time evidence on the relation between ceo equity incentives and the ex ante cost of equity capital prior

52、 research has focused by and large on the consequences of managerial equity incentives for firm performance mehran 1995 hanlon et al2003 and risk taking rajgopal and shevlin 2002 coles et al 2006 hanlon et al 2004 rather than on valuation per se as noted previously to our knowledge only two prior st

53、udies aboody1996 and mehran 1995 both based on pre-1991 data have examined the pricing of managerial equity incentives with mixed results in our study we provide evidence on the valuation effects of ceo equity incentives based on more recent 19922007 data by focusing on more recent data our findings

54、 relate to a growing line of research on the association between equity-based compensation and accounting information quality specifically coffee 2004 suggests that the 1 million limit on the tax deductibility of cash compensation for senior executives imposed by congress in 1993 motivated firms to

55、make greater use of equity compensation which in turn increased the sensitivity of managers to the firms stock price bergstresser and philippon 2006 and cheng and warfield 2005 provide evidence which suggests that equity incentives are positively related to the magnitude of accruals-based earnings m

56、anagement similarly burns and kedia 2006 and efendi et al 2007 report ceo equity incentives to be positively related to accounting irregularities and the subsequent restatement of previously issued financial statements thus prior research suggests that equity-based compensation has a negative effect

57、 on the quality of earnings reported by firms consistent with several published empirical studies that support the notion that lower information quality is priced in a higher cost of equity capital eg bhattacharya et al 2003 francis et al 2005 ceo equity incentives could potentially lower firm value

58、 by increasing the firm-specific equity risk premiumas noted previously we document that ceo equity incentives despite the associated lower information quality are related negatively to the firms ex ante equity risk premium implying that equity incentives increase firm value by lowering the firms co

59、st of equity capitalthus our findings suggest that the positive ceo-shareholder incentive alignment effect associated with equity incentives dominates the dysfunctional information quality effectsince 1992 the securities and exchange commission sec has mandated the public disclosure of executive compensation data to pro