Case Study On Multi-period Equity Incentives Of Huangshan Novel Co.,Ltd.

With China’s entry into the network and information age,the role of talents in enterprises is increasingly prominent,and the demand of enterprises for talents is increasing.In order to enhance the loyalty of employees and make them maintain long-term and effective work enthusiasm,equity incentive has been continuously applied in China in recent years,and has been proved to be effective by practice and theory.In 2020,440 A-share listed companies issued448 equity incentive plans,with a year-on-year growth of 32.94%,a record high.The number of multi period equity incentive reached 208,with a year-on-year growth of 30.82%,gradually forming a normalization trend.Equity incentive mechanism is becoming more and more important in the company’s strategic level,and listed companies will be more competitive and responsible in the establishment and improvement of medium and long-term incentive mechanism.Huangshan Yongxin Co.,Ltd.was listed on the SME Board of Shenzhen Stock Exchange in2004.It is an enterprise in the plastic packaging industry.The company regards equity incentive as an important incentive system,which has been used in talent management for a long time.In June 2006,October 2012 and June 2020,three equity incentive plans will be implemented respectively.During this period,the company maintained steady development and gradually expanded its scale,which is closely related to the company’s emphasis on establishing a scientific salary management system and stabilizing core talents.How to design the scheme of equity incentive in the third phase of Yongxin shares? What experience and enlightenment can be provided for the equity incentive of the same industry and other listed companies? This is very worth exploring.On the basis of reviewing the relevant literature,this paper first expounds the relevant concepts and basic theories of equity incentive,then introduces the implementation background and process of equity incentive of Yongxin shares,and then makes a comparative analysis of the three phases of equity incentive elements,and discusses the implementation effect of the three phases of equity incentive.The results show that the first and the third announcement of incentive plan have a positive effect on the company,but the response of the second market is not positive.From the perspective of financial effect,equity incentive has a positive impact on profitability and development ability.In addition,equity incentive can stabilize the company’s core talents,increase R & D expenditure and promote the company’s R & D innovation.Based on the above analysis,this paper summarizes the experience and Enlightenment of equity incentive of Yongxin stock,which is to choose the appropriate equity incentive mode,the appropriate timing of equity incentive and the reasonable incentive object.Finally,in view of the problems existing in the equity incentive scheme of Yongxin stock,four suggestions are put forward: appropriately extending the incentive period,improving the performance appraisal system,making the exercise conditions more scientific and improving the equity incentive safeguard measures.This paper hopes to provide more perfect suggestions for the case enterprises,and also provide reference for other enterprises willing to implement equity incentive.