Research On The Improvement Of L Company’s Stock Incentive Scheme

Equity incentives are an important means to retain core talents and reduce agency costs.More and more companies incorporate equity incentive plans into their development process.However, there are not a few companies that have declared failures. Therefore, how to set up areasonable equity incentive plan has become the focus of the company’s current attention.There search object of the article is L Company, a private technology-based enterprise, which first launched an equity incentive plan in 2016. Through a comprehensive analysis of the equity incentive plan of the L company, find out the shortcomings in it,and give corresponding improvement suggestions,hoping to improve the final implementation effect of the equity incentive of the L company.This article first makes an overall understanding of the basic situation of L company from its corporate governance structure,financial status, and human resource status. Secondly, it sorted out the content and exercise results of L company’s equity incentive plan, analyzed and evaluated the final implementation effect of equity incentives from four aspects: financial indicators, stock price changes, personnel structure and equity structure changes. The analysis found that L company has the problems of insignificant equity incentive effect, large gap in incentives between executives and core talents, and loose equity incentive exercise conditions. The reason can beattributed to the unscientific design of the equity incentive plan, the lack of selection criteria forincentive objects,and the imperfect performance evaluation system. Therefore, in response to theabove issues, the article proposes improvements to the L company’s equity incentive plan based on the principles of compliance with laws and regulations, reality and effectiveness, and operability. The specifie content includes clarification of the criteria for the selection of incentiveobjects, reasonable selection of equity incentive models, extension of the exercise period, and Introduce industry parameters to set exercise prices and improve performance evaluation indicators. Finally, formulate corresponding safeguard measures for the improved cquity incentive plan, propose to strengthen the company’s internal supervision, establish an equity incentive governance committee, and test the market response in advance for the implementation Equity incentives are an important means to retain core talents and reduce agency costs.More and more companies incorporate equity incentive plans into their development process.However,there are not a few companies that have declared failures.Therefore,how to set up a reasonable equity incentive plan has become the focus of the company’s current attention.The research object of the article is L Company,a private technology-based enterprise,which first launched an equity incentive plan in 2016.Through a comprehensive analysis of the equity incentive plan of the L company,find out the shortcomings in it,and give corresponding improvement suggestions,hoping to improve the final implementation effect of the equity incentive of the L company.This article first makes an overall understanding of the basic situation of L company from its corporate governance structure,financial status,and human resource status.Secondly,it sorted out the content and exercise results of L company’s equity incentive plan,analyzed and evaluated the final implementation effect of equity incentives from four aspects:financial indicators,stock price changes,personnel structure and equity structure changes.The analysis found that L company has the problems of insignificant equity incentive effect,large gap in incentives between executives and core talents,and loose equity incentive exercise conditions.The reason can be attributed to the unscientific design of the equity incentive plan,the lack of selection criteria for incentive objects,and the imperfect performance evaluation system.Therefore,in response to the above issues,the article proposes improvements to the L company’s equity incentive plan based on the principles of compliance with laws and regulations,reality and effectiveness,and operability.The specific content includes clarification of the criteria for the selection of incentive objects,reasonable selection of equity incentive models,extension of the exercise period,and Introduce industry parameters to set exercise prices and improve performance evaluation indicators.Finally,formulate corresponding safeguard measures for the improved equity incentive plan,propose to strengthen the company’s internal supervision,establish an equity incentive governance committee,and test the market response in advance for the implementation of equity incentives.This paper studies the situation of L company’s equity incentives,improves its existing shortcomings,and improves its management system,which will help improve its incentive effects and achieve the company’s strategic goals.At the same time,it provides a reference for other technology-based companies to implement equity incentives.