Discussion On Equity Incentive Case Of Huangshan Yongxin Joint Stock Co.,Ltd

With the development of economy,the management mode of the company is becoming more and more complex,and the stock rights are becoming more and more dispersed.In order to develop continuously in the long term,the listed companies in various countries have to innovate the management mode and tie the enterprise objectives and the management personnel goals together as far as possible.Therefore,stock options and other forms of equity incentive mechanism has been used more and more.The company grants equity to its managers,core technicians and other business operators,so that its own value is closely linked to the interests of the enterprise,so that it can make rational strategic plans and take positive actions for the long-term consideration of the company.To ensure that strategic goals can be achieved perfectly,this way of long-term incentives is Equity incentive.Compared with the developed countries,the market economy system of our country matured late,and it was not until the 1990 s that the enterprises began to implement the stock right incentive system,while the western developed countries had already emerged as early as the 1930’s of the 20 th century.Due to the immaturity of macro-economic conditions and the distinct characteristics of market economy compared with foreign countries,many new problems and new challenges have been encountered in the process of implementing equity incentive in Chinese enterprises.Huangshan Yongxin Co.,Ltd.(hereinafter referred to as Yongxin shares)is one of the first listed companies in China to implement the equity incentive mechanism,and is also one of the few companies to complete the equity incentive scheme,despite the share incentive scheme formulated by the company.It is not perfect,and some practices in the process of implementation are also worth discussing and consultation,but generally speaking,there is still something worth drawing lessons from and vigilance in implementing the stock right incentive system for the listed companies in our country.This paper takes literature research and case data as the main research methods,selects the principal-agent theory and human capital theory as the research basis,and analyzes the equity incentive scheme of Yongxin shares,among many related theories,which is based on the principal-agent theory and the human capital theory.On the basis of the results obtained after the implementation of the equity incentive scheme,this paper finds out the advantages of the equity incentive scheme,and puts forward some personal views for other listed companies in implementing the equity incentive scheme.Firstly,this paper analyzes and summarizes the existing theories of equity incentive at home and abroad by means of literature research,and finds out the main theories supporting this paper as well as the present situation of equity incentive in our country.Secondly,the case analysis method is used to analyze the equity incentive scheme of Yongxin shares.This paper analyzes the current situation of Yongxin shares and finds out the motivation of implementing equity incentive,the corporate governance structure and brain drain after the implementation of equity incentive in the company.Based on the analysis of the financial situation,the influence of equity incentive is obtained,and the effect and enlightenment of equity incentive are summarized according to the results of the analysis.This paper is divided into five parts.The first part mainly determines the significance and background of the thesis,through reading a large number of literature,summarizes the domestic and foreign motivation of equity incentives and related theories and the impact of equity incentives on corporate performance related literature.According to the theory,the research ideas and methods are put forward,and the frame structure of the thesis is constructed.The second part introduces the concept and related theoretical basis of equity incentive,and summarizes the stock option,virtual stock,performance stock,stock appreciation right,restricted stock plan,and so on,and summarizes the stock option,virtual stock,performance stock,stock appreciation right and restricted stock plan.Management buyout and other models,China’s equity incentive theory is mainly:principal-agent theory,human capital theory,incentive theory.The third part briefly introduces the general situation of Yongxin joint-stock company,then introduces the purpose,the object,the specific content,the valid period,the change and the termination condition of the first incentive scheme of Yongxin joint-stock company.Finally,the paper introduces the implementation of restricted stock incentive measures in Yongxin’s first share equity incentive scheme and the third exercise of stock option incentive measures.The fourth part is the motivation and effect analysis of Yongxin stock equity incentive.Firstly,it introduces the motivation of Yongxin stock ownership incentive.The main reason of Yongxin stock equity incentive is to perfect the corporate governance structure.To retain outstanding talents and enhance the company’s ability to operate to achieve the ultimate goal of sustainable development,and then analyzed in detail the effect of the implementation of the equity incentive of Yongxin shares.Analyze the perfect effect of corporate governance structure from the change of the board of directors and the members of senior management;This paper analyzes the brain drain and talent restraint of Yongxin shares after the implementation of equity incentive from the changes of senior executives and employees,and analyzes the implementation of equity rights from the change of financial indicators.After the incentive,the operating capacity of Yongxin shares changes.From the aspects of profitability,growth ability,operating ability,solvency and other financial indicators,this paper makes a comparative analysis of the operating performance of Yongxin Stock Company before and after the equity incentive.The fifth part is the conclusion and enlightenment of Yongxin stock equity incentive mode.According to the results obtained after the implementation of the equity incentive in Yongxin shares,it is concluded that the implementation of the equity incentive can effectively improve the corporate governance structure,and the equity incentive is beneficial to the perfection of the corporate governance structure and to the stabilization of enterprise talents.These four conclusions are beneficial to enhance the competitiveness of enterprises and achieve the same purpose between employees and enterprises.The successful implementation and good results of Yongxin share equity incentive scheme are mainly due to the combination of Yongxin shares and their own actual situation.The mixed incentive scheme has been formulated,and the corresponding system has been formulated to ensure that the scheme is carried out smoothly.Some enlightenments can be given to other enterprises in our country,such as:the stock incentive should set a reasonable period and the number of feasible rights,the equity incentive should set a reasonable exercise price,the implementation of the equity incentive should be combined with a variety of equity incentives,and so on.Based on the research theory of Chinese and foreign scholars,this paper draws a conclusion through case analysis: in the design of equity incentive scheme,listed companies should first set up a reasonable period of no-sale of shares and the number of feasible rights,and reasonably control the incentive intensity.This is not only to comply with the relevant laws and regulations,but also to control the income gap among directors,executives,core talents and ordinary employees within a reasonable range,so as not to undermine morale.Secondly,according to the requirements of relevant laws and regulations and combined with the specific situation of the company to set a reasonable exercise price,so that equity incentive can not become a special benefit formanagement,so that equity incentive can achieve more.In order to improve the effect of equity incentive,it is necessary to combine many kinds of equity incentive methods to improve the effect of equity incentive.