An Exploration Of Stock Incentive Mode For Ningbo Small And Middle Private Enterprises

Equity incentive has always been the main motivation means for a lot of listed companies.The research of equity incentive to SMEs especially for Ningbo local SMEs is quite weakThrough reading large number of materials, visiting a lot of Ningbo SMEs, the authorlearns some experience and gains in equity incentive and starts practice within his owncompany.In this paper, author learns advantages from and absorbs domestic enterprises andforeign enterprises, combines practice of local SMEs and puts forward equity incentive in4different stages in the development of company.1. Start-up period, due to lack of funds, incomplete of the financial system weakprimitive accumulation, uncertain prospects for business development, so basically weshall use the virtual stock options and future options.2. Development period, due to the high dependence on foreign trade, once NingboSMEs sell good one type of products, they will have a rapid boom. So we shall use equityincentive stock options, incentive stock form of deeds, virtual stock form of incentive. Alarge proportion of enterprises take the form of restricted stock incentives.3. Expansion period, due to stable business scale and weak innovation capacity, socompanies will have multiple projects and attract investment or technical personnel. Sowe generally use real shares or stock options.4. Maturity period, most of the use of sophisticated business management, equityincentives used in another way in addition to options in the form of incentives, but alsounlimited form of equity incentive, stock incentive in the form deeds, the annual salarysystem in the form of equity, stock appreciation rights and other forms.Main innovation of this paper is that taking into account some characteristics of smalland medium enterprises in Ningbo, combines with the four stages of the development oflocal enterprises to develop the appropriate equity incentive models and these models, intheir own business practices, so that the whole postgraduate learned to be fully utilized.