Case Study Of Wangsu Employee Stock Option Incentive Program

Wangsu Technology Co.,Ltd is a private hi-tech company, which provides CDN (Content Delivery Network) and IDC (Internet Data Center) service.After more than ten years of business development,Wangsu has become the leading internet content distributor in China. Wangsu was listed on Shenzhen GEM in2009. Even now, it is still the only CDN provider in domestic listed companies.To Wangsu.the key competition is the talent. Wangsu adopted employee stock incentive plan,in order to fully arouse the enthusiasm of employees.This plan permits more than100executives and core employees to purchase Wangsu’s ordinary shares. those executives and employees were selected by the board of directors.This paper, at first, introduces several basic theories related to stock incentive. At the same time, the author studies on the development of domestic and overseas stock option incentive, and several common stock option incentive models.And then, the design and implement effects of Wangsu’s employee stock incentive plan is analyzed, which is the most significant part of this paper. Through information collected and analyzed,as well as the author’s personal working experience, this paper found that the plan is well designed,and results are remarkable. After the implementation of the plan, the company made a better performance, provided much more additional benefits, and achieved a higher share price. The company, employees and investors are all benefited from the plan.In addition,this paper summarizes several defects about the plan,and proposes several suggestions.Wangsu may improve the plan through adopt some other stock option incentive models, establish more aggressive performance evaluation index,and apply floating exercise price.