Research On Employee Stock Ownership Plan Of CZ Company

This paper makes a case study on Company CZ and focuses on the stock ownership practice in Company CZ by way of the comparison before and after system restructuring. Company CZ is a small and medium-sized enterprise specialized in tea processing and marketing. The tea culture enjoys a long history in China which is the origin of tea drinking, planting and making. China is known as a state of ceremonies where the tea culture is a phenomenon of distinctive Chinese cultural features and plays an essential part in cultivation of Chinese national spirit quality. As a worldwide beverage, tea has become increasingly popular. There has been a growing tea consumption in both developed and developing countries. The development of tea industry, therefore, can never be ignored. As the financial crisis sweeps the world, small and medium-sized enterprises in China suffer from a sharp decline. In 2009, Company CZ restructured and transformed from a state-owned enterprise into a limited liability company and implemented stock ownership incentive policy with employee stock ownership mechanism. The case chosen in this study is a successful example of how state-owned enterprises restructure and implement employee stock ownership mechanism. The analysis of employee stock ownership mechanism in Company CZ is expected to indicate directions and provide ideas for small and medium-sized enterprises to implement stock ownership incentive policy.The paper covers the theoretical foundation of employee stock ownership policy, implementation situation of employee stock ownership in Company CZ, effect analysis, existing problems and countermeasures of employee stock ownership practice in Company CZ, as well as conclusions and prospects. From the perspectives of corporate growth, performance evaluation and employee characteristics, the paper analyzes the positive influences when employee stock ownership policy is implemented in Company CZ.Company CZ is a representative of state-owned enterprise restructuring. After almost six-year development, it has maintained revenue improvement but is still rated as a low-profit company, with certain difficulties to become bigger and stronger. For this reason, Company CZ plans reconstruction and expansion in 2015 as well as cooperation with Ziyang Se-Enriched Tea Co., Ltd, a large organic tea producer and seller in Shaanxi Province. This paper aims to make further revision and improvement of the existing employee stock ownership system of Company CZ so as to lay a solid foundation for its growth and prosperity.Contributions of this paper are listed as follows. It is established on extensive literature reading. With a case study of employee stock ownership system in Company CZ, the paper provides a detailed introduction of its stock ownership incentive plan, analyses the process of stock ownership incentive implementation from an objective perspective, carries out in-depth analysis on its operation, cost control and corporate performance after implementing employee stock ownership policy, studies and discuses problems taken place in the six years since the implementation of employee stock ownership policy, puts forward suggestions in view of the actual situation in Company CZ, obtains enlightenment through the case study, and expects to provide reference to small and medium-sized enterprises in stock ownership incentive implementation.