Research On Equity Incentives In China's Aluminum Industry

An unprecedented financial crisis sweeping across the world and spread to all walks of life, falling corporate benefits managers with high contrast formed bonuses, extra spark debate about the interests of business owners and managers deviate from an in-depth reflection.Human capital theory, principal-agent theory explains both equity incentive could be the interests of shareholders and managers to effectively integrate and reduce the shareholders because the operators resulting from the absence of agency operating costs. This paper hopes to act on equity-based incentives for legal analysis, different models of equity-based incentives, stock options, restricted stock and other comparisons, and further reveal the role of China’s long-term incentive equity incentive generated by the mechanism.Aluminum is second only to iron and steel and nonferrous metals are widely used in all walks of life. China’s aluminum industry, the majority of enterprises as state-owned enterprises, the rapid development of these enterprises play a decisive role in China’s national economy. At the same time aluminum products with certain financial characteristics, business efficiency and financial markets, changes in solidarity, so China’s aluminum industry, conducted a study on equity incentive has very important practical significance.At the national laws, regulations and policies under the guidance of the progressive present, China’s listed companies in Shenzhen and Shanghai are about 7% of companies have implemented an equity incentive. Aluminum industry has also started to conduct a more equity-based incentives a useful attempt, listed companies and non-listed companies have varying degrees of application. In general, these attempts revealed the process of practice incentive lag, incentive fatigue, motivation failure, random motivation to inspire blind spots and many other issues.This article attempts to tap the causes for understanding is not in place, no difference in motivation, lack of market risk, early warning, rules and regulations are not perfect, the imperfect structure of corporate governance issues such as put forward countermeasures proposed ways to solve the problem related to. This article will Jiangxi Copper Company’s exemplary practices introduced to the Chinese aluminum industries, the operation and long-term equity incentive for people troubled by the problem and introduce the design of composite equity incentive model, holding company, dynamic and innovative line of power prices, etc. solution.Hope that this paper is able to provide Chinese aluminum industry, the implementation of equity incentive plans and provide some useful lessons.