The Analysis Of Equity Incentive Plans' Design For Essential Factors Of China's Listed Companies

As a long-term incentive mechanism, equity incentive is effective to cut down the cost of entrust-deputy, raise the efficiency of enterprises, and incentive employee, which have been proved in America and other western developed countries. China Securities Regulatory Commission enacted "The Measures Governing Equity Incentive Plans of Listed Companies" (For Trial Implementation) and brought into effect on Jan 4th, 2006, the equity incentive mechanism of China's listed companies come into a regularly operating stage. But whether equity incentive plans of china's listed companies can achieve the anticipated sound effects depends on the appropriateness of equity incentive plans' essential factors.From the enactment of "The Measures Governing Equity Incentive Plans of Listed Companies" (For Trial Implementation) to Jan 18th, 2008, amount to 61 listed companies exposed the equity incentive plans draft which was designed according to the law. After retrospection of the relevant theory about equity incentive plans and the development of equity incentive plans in china, the thesis makes data description of 61 programs, and analyzes eight essential factors of equity incentive plans, which include incentive object, the source of funds, the source of stock, the price of exercising, the scale of provision, the period of validity, exercising proviso, performance evaluation indicators. It is found that there exist some default and limitation in the design of China's equity incentive plans which manifest mainly: the performance evaluation indicators system is not perfect and lay particular stress on profit indicators; the choice of time enactment of exercising price is not appropriate and exercising price is a little low; the period of validity and restriction is not enough for long-time restriction to executives. Meanwhile, through analysis of the design for essential factors of VanKe A and YiLi Shares, by comparison it is found that the design of performance evaluation indicators plays an important role in the whole design of incentive plans, and whether essential factors is appreciate has great impact on the management of the firm.This thesis provides improvement methods for the existing principal problems. In addition, it also suggests supplement methods to the design for other essential factors. At last, this thesis comes up with some useful advice for the improvement of environment of listed companies' equity incentive plans.