Research On Equity Incentive Mode And Operation Mechanism Of Information Technology Enterprises In China

Equity incentive is a long-term incentive strategy. By granting shares to senior executives,the owners can bind their profit,responsibility and risk with the management group,Thus solving the principal-agent problem which due to the separation of ownership and management efficiently.this strategy really serves as a lubricant between owners and managers.Nowadays,the strategy is rather mature and well-accepted globally. Domestically, with the policies like the"Securities Law Equity Incentive Management of Listed Companies (Trial)"and the"State Holding Listed Companies (Domestic) implementation of equity incentive pilot scheme",Equity incentive is getting better everyday.Tech companies is rising rapidly around the world. They are becoming more and more important in both social and economical activities. However, Chinese Tech companies are all facing a serious challenge--good people got stolen every day. So,in order to attract and keep valuable individuals around,The most efficient way for Chinese Tech companies is to cast the traditional salary system away, and introduce a reasonable,effective modern compensation method with incentives to keep the talents motivated.Therefore, this article will take Chinese Tech companies as the research object,then research the equity incentive mode and operation mechanism so as to serve a reference about establishing an effective incentive mechanism for other Tech companies.Through review and analysis of relevant domestic and foreign research literature,this article begin with the theory of principal-agent、human capital、motivation as its foundation and take ZTE as an example.Moreover,this article also mainly adopt the method of case analysis,then analyze the ZTE’s design and implementation of equity incentive mode and operation mechanism.The result shows that implementation of equity incentive is helpful to improve performance of corporations,but due to the problems such as unsuitable incentive model,simple exercise conditions and so on existing in equity incentive scheme of ZTE,thus making it’s equity incentive mechanism is not fully exerted.Based on this,the article puts forward relevant suggestions for improvement afterwards.Finally,this article summarizes the enlightenment based on analysis and research,to serve as a reference for other Chinese Tech companies.