The New&Hi-tech Enterprise Equity Incentive Study

Equity incentive originated in the1970s and1980s, the U.S. Silicon Valley, and it wasrespected by the Western developed countries because of its advantages to solve principal-agent problem and motivate executives efforts for the enterprise’s long-term strategicobjectives. Equity incentive was introduced in our country is not a long time, but it withthe high hopes to solve the principal-agent problem of long-term incentive mechanism, inimproving corporate governance structure, and promoting the performance improvement.This paper start from the view of China’s new&high-tech enterprises equity incentive,find out the existing problem of incentive scheme is too simple, and the results is easy tobe manipulated and the incentive object does not meet the new&high tech enterprises.Through expounding the theory and combining case studies to explore the design of new&high-tech enterprises equity incentive. In this paper, it was based on the characteristics ofnew&high-tech enterprises, it was analysed from the object of equity incentive, model ofequity incentive, appraisal target of equity incentive and so on several aspects to designincentive mechanism in accordance with the characteristics of new&high-tech enterprises,and through the case of Wanda information limited liability company’s equity incentiveplan, to analyse and point out the deficiencies and suggestions. In short, the stock optionincentive effect has been more and more recognized by the new&high-tech enterprisesand listed companies have been more and more widely used, but it does not exist auniversal mode applies to all enterprises, new&high-tech enterprises should focus on itsown characteristics, to make design the equity incentive model to meet the characteristicsof new&high-tech enterprises, in order to better play to the advantage of incentive stockoptions, and really play the role as the "golden handcuffs" of incentives and constraints ofthe core technical personnel. To be well retain key technical personnel, to enhance theinnovative initiative, to increase the competitiveness and make an important contribution tomaintain sustainable development for the high-tech enterprises.