Research On The Implementation Effect Of Restricted Stock Incentives For Baosteel

With the rapid development of China’s economy,competition among enterprises in all walks of life has become increasingly fierce.In order to attract and retain outstanding talents,fully mobilize the enthusiasm of core employees,further improve the core competitiveness of the enterprise,and support the company’s strategic realization and long-term stable development.As a medium-to-long-term incentive,the equity incentive mechanism is used by more and more listed companies.The steel industry,as a pillar industry for the development of the national economy,is closely related to people’s lives.Since the financial crisis in 2008,the steel industry is facing problems such as the continued decline in the domestic comprehensive steel price index,the dilution of traditional steel product profits,overcapacity,increasingly fierce competition for homogenization,and large frictions in export trade.The development of steel companies is weak,and some steel companies have begun to implement equity incentive policies.As a leading company in the steel industry,Baosteel is also a large state-controlled listed company.In 2014,Baosteel took the lead in implementing the restricted stock incentive plan.In 2017,it successfully launched the second restricted stock plan,which is both valid for five years.Baosteel Co.,Ltd.is innovative and scientific in the design of its stock incentive plan.It uses various types of performance indicators,including absolute and relative number standard.The assessment method has both its own vertical performance comparison and horizontal performance in the same industry.In contrast,the assessment conditions are stricter and the incentive is greater than the welfare.Therefore,this paper takes Baosteel as the specific research object,and uses case study method to study the implementation effect of Baosteel’s first restricted stock incentive plan in detail from two perspectives of financial performance and non-financial performance.The financial performance perspective specifically includes the profit for Baosteel Ability,solvency,operating ability and development ability to conduct their own vertical and horizontal comparative analysis respectively.The non-financial performance perspective includes four aspects: short-term market response,management opportunistic behavior,corporate R & D innovation ability and human capital.To study the implementation effect,it is concluded that the first restricted stock incentive significantly improved the profitability of Baosteel and the opportunistic behavior of management,and increased the management’s emphasis on corporate R & D innovation and human capital.The effects of capabilities,operational capabilities,development capabilities,and reductions in executive turnover are not obvious.Next,evaluate the elements of the first stock incentive plan.Finally,the introduction of the second phase of the stock incentive plan is introduced,and the innovations and improvements of the second phase of the plan are compared and analyzed.It is hoped that through the research on the implementation effect of the restricted stock incentive of Baosteel,the design highlights of the two phases before and after the synthesis of the Experience can provide some steel companies in the same industry and even other industries with some thoughts and experiences that can be borrowed and learned when designing and implementing restricted stock incentives,so that the theory of the evaluation of the effect of equity incentive implementation is more abundant and perfect.In this way,more and more practices have been obtained,which have played an ideal and positive role in helping Chinese enterprises to achieve better sustainable development.