Study On Equity Incentive Of State Holding Listed

In China, state holding listed companies occupy an important position in the national economy. However, serious principal-agent problem and lacking of effective medium- and long-term incentive mechanisms have hindered their development and growth. The formal implementation of “Administration of Equity Incentive Plans of Listed Companies(For Trail Implementation)”, “Company Law” and “Securities Law” on January 1, 2006 provided essential conditions for the trial use and development of equity incentive mechanisms. In September 2006, the State-Owned Assets Supervision and Administration Commission(SASSAC) issued the “Trial Measures for Implementing Equity Incentive Plans by State Holding Listed Companies(Domestic)”. State holding listed companies formally began to try their hands in equity incentive, which was then be widely applied as an effective solution to principal—agent problems and an important medium- and long-term incentive approach.However, although state holding listed companies have adopted equity incentive for nearly a decade, they still lag far behind private listed companies in both amount and model innovation, and even stopped development for a period of time. The 3rd Plenary Session of 18 th CPC Central Committee stated that at current stage, the fundamental direction in deepening the SOE reform is developing a mixed economy, thus pointed out the direction of accelerating the development of equity incentive at a new starting point. Against such background, this article aims to study the implementation situation of equity incentive mechanisms by state holding listed companies in the last decade and make suggestions to existing problems of equity incentive mechanisms of state holding listed companies, hoping to offer beneficial reference for the future sound development of equity incentive in China.Based on research of existing documents, the article will first explain relative concepts and theoretical basis of equity incentive, and then elaborate the equity incentive exploration of China’s state holding listed companies by stages. It will analyze the status quo, characteristics and existing problems of state holding listed companies on the basis of 120 equity incentive plans issued by 103 state holing listed companies at SSE and SZSE during the 8 years from February 2006 to December 2014. The main research method adopted is a combination of normative and case studies, while taking in statistical analysis and comparative analysis at the same time.Taking the case study results of 3 equity incentive plans of Shanghai Jahwa, which had been restructured from a state-owned enterprise into a mixed ownership enterprise, as well as the problems currently facing equity incentive of China’s state holing listed companies into consideration, the article holds that mechanistic problems is a key factor, but not a decisive factor, to the development speed of equity incentive. Therefore, the article gives the following suggestions: strengthen unified legislation of equity incentive, speed up the construction of the capital market, enhance the effectiveness of the securities market, standardize the corporate governance structure, establish a competitive manager market, and make scientific equity incentive plans.