Class of Control Shareholding, Managerial Stock Incentives and Firm Performance: Evidence from the Chinese Securities Market

摘要

Many studies have examined the relationship between managerial ownership and firm performance. However, the actual form of relationship differs across these studies. This paper examines how firm performance is affected by managerial stock incentive based on the class of control shareholding using data more than 3947 samples during 1999-2005. I find that the link between incentives to top-manager and firm performance is related to the class of control shareholding. So I argue that prior finding is most likely a statistical artifact. Specifically I find strong positive relationship between incentives to director and performance in central government control firms, and statistically insignificant relationship between firm performance and incentive ownership to supervisory board for the three kind of control stockholding. The paper extends prior literatures by conducting tests on the association between firm performance and stock incentive subject based on class of control shareholding.