Can Relative Performance Evaluation Improve Corporate Performance: Evidences from the Equity Incentive Schemes of Private Listed Companies

Abstract

Abstract: Taking 2008-2018 A-share private listed companies that have implemented equity incentives as samples, this paper examines the impact of private listed companies' implementation of relative performance evaluation in equity incentive schemes on corporate performance. The findings show that by implementing relative performance evaluation in their equity incentive schemes, the private listed companies can significantly improve their corporate performance. Further research shows that among the private listed companies with weak management capabilities, those implementing the relative performance evaluation will have a stronger incentive effect on their management and have a more significant promoting effect on corporate performance. Compared with the strong relative performance evaluation, adopting the weak relative performance evaluation is more conducive to improving corporate performance.

Key words: relative performance evaluation, management ability, company performance, private listed companies

CLC Number:

F275.5

LING Xiao-ting, XUE Yu-jia. Can Relative Performance Evaluation Improve Corporate Performance: Evidences from the Equity Incentive Schemes of Private Listed Companies[J]. Contemporary Finance & Economics, 2021, 0(5): 138-148.

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