Abstract
Purpose. This study investigates the impact of equity incentives on the financial performance of Chinese A-share listed high-tech enterprises, focusing on verifying the overall effectiveness of equity incentives and analyzing the differentiated effects of key elements of equity incentive plans, so as to provide empirical support for hightech enterprises to optimize incentive scheme design.Theoretical Framework. Based on principal-agent theory, incentive theory, and human capital theory, this study holds that equity incentives can align the interests of managers, core employees, and shareholders, reduce agency costs, and fully release the value creation potential of human capital in knowledge-intensive high-tech enterprises.
Methodology. Using an unbalanced panel dataset of 1,233 high-tech enterprises from 2017 to 2024, this study constructs multiple linear regression models with return on equity (ROE) as the dependent variable, controlling for financial characteristics, corporate governance factors, as well as year and industry effects. Robustness tests are conducted by replacing the explained variable and lagging it by one period.
Findings. Equity incentives significantly improve the financial performance of hightech enterprises, with ROE 1.6 percentage points higher during the incentive period. The results remain robust after replacing ROE with return on assets (ROA) and lagging the dependent variable by one period. An analysis of the elements of equity incentive plans reveals that restricted stock outperforms stock options; broader incentive coverage, higher incentive intensity, and lower incentive prices all exert positive effects; the positive effect of incentive intensity is more pronounced in the lagged one-period model; and the incentive validity period shows no significant correlation with performance.
Conclusions and Recommendations. Equity incentives serve as an effective longterm governance mechanism for high-tech enterprises, validating the applicability of the core theories in this context. The above findings provide targeted guidance for
high-tech enterprises to design scientific incentive schemes and enhance core competitiveness. High-tech enterprises should adopt restricted stock as the core tool, expand incentive coverage to core technical and managerial personnel, set gradient
incentive intensity linked to contribution, adopt flexible pricing within regulatory limits, and design dynamic schemes aligned with their innovation cycles.