Abstract

Human capital is an important factor in wealth creating and economic growth (Becker and Murphy, 1991). For enterprises, human capital not only includes firm executives, but also includes middle management, core technical staff and general staff. In the chain of principal-agent, the shareholders of the enterprise—firm executives—the backbone employees—the general staff, and the backbone employees are all important parts of the agent. The backbone employees' efforts directly affect the realization of company's business objectives and the value of shareholder (Chen et al., 2015). Giving equity to owner of human capital, especially the key employees, has become an important measure for many enterprises to improve corporate governance.

In practice, government departments also set up some series of rules and regulations on the scope of listing Corporation about the equity incentive target. January 1, 2006, the implementation of the“listing Corporation equity incentive management approach (Trial) ”provided: equity incentive targets include directors, senior management persons, core technical persons or core business persons, and other employees who be approved by the company. December 11, 2008, the State-Owned Assets Supervision, Administration Commission of the State Council and the Ministry of Finance jointly issued the notice on regulating the implementation of equity incentive system of state owned listing corporation: listing corporation equity incentive plan should focus on the senior management and core technology backbones, who have direct impact on the company's op erating performance and future development. June 20, 2014, the Securities and Futures Commission issued pilot guidance on the implementation of employee stock ownership in listed Corporation, deploying stock ownership to employees of listing corporation. February 26, 2016, Ministry of finance, State-Owned Assets Sup ervision and Administration Commission of the State Council, and the Ministry of Science and Technology jointly issued the Interim Measures for equity and dividend incentives of state owned scientific and technological enterprises, encouraging the implementation of equity incentive for the important technical persons and managers of state owned scientific and technological enterprises, and encouraging scientific and technological personnel innovation and achievement transformation.

The curtain has been opened to implement equity incentive on the staff. Although the literature from the viewpoint of executive equity incentive examine the effect on corporate performance, investment, financing and dividend distribution behavior, obtaining some enlightening conclusions. However, it is still a new field of research to incorporate backbone employees into equity incentive, For example, whether the backbone employees stock ownership incentive affects the performance of the company, If so, what is the kind of mechanism to affect the company's performance and other issues, The existing literature has not been deeply discussed.

Under this background, this paper refer the domestic and foreign literature, Combined with the actual situation of listing corporation in our country, focusing on the backbone employee stock ownership incentive problem. we do the following exploratory research: ① review the relevant literature, such as equity incentive, employee stock ownership incentive, employee stock ownership and so on; ② recommending the implementation of equity incentive in China's listing corporation, esp ecially from the persp ective of the scope of equity incentive, to analyze the issue of employee stock ownership incentive; ③ exploring the relationship between employee equity incentive scope and operating performance of listing corporation, and find that employee equity incentive significantly influence the performance of listing corporation, esp ecially in the state-owned enterprises; ④ exp loring the relationship between employee stock ownership incentive strength and operating performance of listing corporation, and find that the emp loyee stock ownership incentive intensity significantly affects the performance of the listing corporation, and the relationship is more significant in state-owned enterprises; ⑤ from the angle of the efficiency of research and development (R & D), discussing how employee equity incentive affects corporate performance. The study find that expanding the scope of the employee equity incentive or enhancing employee equity incentive intensity both can significantly improve the ability of enterprise research and development efficiency, transferring research and development expenses into patent. The employee equity incentive can significantly improve the efficiency of enterprise development, which may be the possible mechanism that emp loyee equity incentive influences the corporate performance.

Specifically, this paper mainly includes three parts.

The first part is the research basis, including chapter 1, 2 and 3. Among them, the first chapter is introduction, mainly briefing introduction of the full text, such as the research background and putting forward the research question, the theoretical research significance and practical research significance, the research train of thought, main content and research framework, improvement of existing literature and the innovation of this article. Chapter 2 is literature review, commenting executive equity incentive and emp loyee equity incentive and employee shareholding literature, with the goal of lying a solid theoretical foundation to build empirical model and empirical test for subsequent chapters. Chapter 3 introduces the Chinese listed company equity incentive system background, and analyzes the status quo of China's listed company equity incentive and the existing problems. So this is realistic foundation for the empirical study.

The second part is the most important part of the paper, including chapter 4, chapter 5 and chapter 6, three empirical chapters. Chapter 4 is the starting point of this paper's empirical research—the relationship between employee equity incentive scope and the operating performance of listed companies. First of all, testing the question“whether employee equity incentive range affect firm performance”. This determines whether the subsequent chapters empirical research can continue; Second, researching what the relationship between employee equity incentive scope and corporate performance is, whether there is a significant difference in different cases, playing a better role of employees equity incentive to provide the preliminary theoretical sup port.

Chapter 5 goes on promoting employee equity incentive and corporate performance relationship research, from the persp ectives of employee equity incentive strength. Empirically, emp loyee equity incentive intensity has important influence on corporate performance, that is, how much emp loyee equity incentive affect corporate performance. First of all, empirically whether employee equity incentive intensity affect company performance. Second, analyze which situation the relationship between employee equity incentive intensity and the corporate performance is different, whether there was a significant difference. Providing further support for the effect of employee equity incentive intensity.

Chapter 6 explores possible mechanisms that employee equity incentives affect firm performance, based on the found in the previous section. From chapter 3, we introduce Chinese listed company equity incentive system background. The main targets of employee equity incentive are the key technology and the core staff. The possible mechanism closely relating to the level of efficiency and innovation levels may be innovation behaviors. As a result, employee equity incentive effect for the technical personnel may promote the company's research and development efficiency. This chapter follows the idea, and exam the relationship between employee equity incentives and R & D efficiency, including the scope of employee equity incentive and incentive intensity, providing theoretical support to better understand the effect of emp loyee equity incentive.

Chapter 7 is the article conclusion, including the research conclusion of this article, enlightenment and policy recommendations, the limitations of this study, and research perspectives.

The research conclusions of this paper are as follows:

First of all, 2006 was the first year of the equity incentive of listed companies in our country, b ut the real road on the right track of equity incentive practice started in 2010. From 2006 to 2014, the average number of employees equity incentive and the backbone employees rise year by year, the mean number of executive incentive decrease year by year, showing that listed company equity incentive object scope expanded year by year in our country. The average numb er of employees for every equity incentive plan is 128, about 7.55% of the total staff number of listed companies. And employee stock ownership incentive share is about 2.31% of the total equity of listed companies.

Second, the wider employee equity incentive range is, the higher return on total assets (ROA) of companies and the return on equity (ROE) is, compared with the private sector, the expanding effect of the employee equity incentive scope is more significant in State-owned enterprises. The empirical evidence shows that expanding the employee equity incentivescope of the listed company can motivate employees to improve the production efficiency, and raise the company's performance.

Third, the greater employee equity incentive intensity is, the higher return on total assets (ROA) and the return on equity (ROE). Compared with the private enterprise, the expanding effect of the employee equity incentive scope is more significant in State-owned enterprises. As a result, promoting employee equity incentive intensity also has positive effects on corporate performance.

Fourth, the wider range and greater share the employee equity incentive is, the innovation level of the enterprise is higher. At the same time, the wider employee equity incentive range is, the R & D efficiency is higher. As a result, the relationship between employee equity incentive and the innovation level of listed company is achieved through improving the efficiency of research and development. In addition, there were significant differences under the different enterprise property rights, when the employee equity incentive range is wider in the state-owned enterprises, the level of innovation is higher; in the non-state-owned enterprises, the relationship between the scope of equity incentive and innovation levels is not significant.

The above research results indicate that both the employee incentives scope and employee incentive intensity can have a positive impact on corporate performance. At the same time, employee equity incentive can improve the company's research and development efficiency. As a result, expanding the scope of equity incentive or giving employee more equity share compensation can both improve employee income and company innovation together, promoting enterprise long-term, sustained and healthy development.

Compared with the existing literature, the innovations of this paper are:

First of all, the research angle of this pap er is new. This pap er focuses on the internal factors—the equity incentive object, which is different from most of the existing equity incentive research literature. On the one hand, the available research literature generally view equity incentive equity incentive as a homogeneous and same“black box”, testing the implementation effect of equity incentive. These pap er ignore the relationship between the internal factors of equity incentive contract and economic consequences. In fact, the contract content of equity incentive, esp ecially the size of the incentive object scope, will also impact on incentive effect. On the other hand, the available research literature generally regard equity incentive object as executives, ignoring a fact that about three-quarters of the shares of equity incentive plan are granted to the backbone employees.

Second is the research object. This article focuses on employee equity incentive prob lems, introducing emp loyee equity incentive problems in the field of corporate governance for the first time. And this article provides empirical evidence for employee equity incentive based on China's capital market. Existing research literature focuses on executive equity incentive, and pays little attention on employee, leading there are empty evidences about employee equity incentive effect on corporate performance, and also the mechanism of employee equity incentive affection on corporate performance. As a result, introducing employee equity incentive contract to the field of corporate governance, and the analysis of the role of employee equity incentive to the improvement of corporate performance, can rich two aspects of the literature in corporate governance and employee incentive at the same time.

Third is the research framework. This paper not only test the employee equity incentive effect on the performance of the company, and but also discuss the possible mechanism of the influence from employee equity incentive scope and employee incentive intensity. Compared with pure research on equity incentive, we build the employee equity incentive analysis framework and explore how it affects the performance of companies op erate consequences, This paper constructs an analysis framework structure, which includes employee equity incentive, R & D investment, R & D outp ut (innovation), and corporate performance factors. As a result, this paper not only helps peop le understand emp loyee equity incentive range and intensity influence on the performance of listed companies, but also give a new train of thought for innovation research, about how to enhance the level of research and development efficiency of listed companies.

Fourth, this paper attempts to define“the research and development expenses transformation to the innovation of enterprise”as research and development efficiency, which is different from existing documents. At the same time, empirically exam the impact of employee equity incentive on the R & D efficiency from the persp ective of the stakeholders, linking property right reform and innovation through employee equity incentive for the first time.

Key words: Equity Incentive; Incentives Coverage; Incentive Intensity;

Operating Performance; Innovation Level