The Research On Interests Balancing In Equity Incentive Plan Of State-owned Listed Corporations

Equity incentive is a kind of management system that the enterprise owners try to encourage managers and employees to work hard and keep good faith by granting them a certain amount of equity. Equity incentive can make the interests of the shareholders and managers tend to be more consistent, so it is helpful to solve the agency problem in corporate governance. The generalized equity incentive both includes the management equity incentive and employee equity incentive, namely the employee stock ownership plan. Equity incentive originated in the west and was widely applied in the management incentive in the United States in the 20 th century, 80 years. After the reform and opening up, China gradually introduced the equity incentive system, and the equity division reform in China in 2005, provides conditions for the implementation of equity incentive.The basic theories of equity incentive mainly include principal-agent theory, human capital theory and property rights theory, which provides reasonable reasons for enterprise to implement equity incentive plan. Since 2005, equity incentive system has rapidly developed in china. But look from the body of the implementation of equity incentive, a lot of private listed companies have launched the equity incentive plan, but, by contrast, the number of state-owned listed companies is much smaller. Look from the object of equity incentive, the number of management equity incentive scheme is much more than the employee stock ownership plan. This shows that, in State-owned shares of listed companies, the use of incentive mechanism is still not fully. Governments need to further improve the system design and related policies, which promote the widespread implementation of stock ownership incentive system.In the process of the establishment and development, Equity incentive is heavily influenced by China’s special national conditions and local environment, so there will be some special problems. For the implementation of equity incentive, In China, there are mainly four aspects of the special conditions: First, the proportion of state-owned equity in state-owned listed companies is very high and the real state shareholders do not hold the stock directly. Second, the agent relationship of state-owned listed companies is more complex, so the "agency problems" is more serious. Third, Managers of State-owned listed company has two identities, that is, government official and enterprise manager. Finally, China’s Stock market is not mature enough, for the history of Chinese stock market is very short, so that in China the problem of "the validity" is more outstanding. The above special national conditions, make the interests relationship between state-owned shareholders, minority shareholders, company managers and employees more complicated in state-owned listed companies of China. Based on the above consideration, state-owned listed companies need to consider more factors, trying to balance the interests of enterprise, state-owned shareholders, minority shareholders and employees.This article revolves around the problem of interests balancing in equity incentive Plan of state-owned listed corporations. The article consists of the following parts:The first part is introduction, in this part, the author briefly analyzed the issue, and introduced the background and the status quo of this research. In addition, the authors introduced the research ideas, research methods, innovation and deficiency. Chapter I is mainly about the equity incentive theory and empirical studies. The theoretical research part will focus on the principal-agent theory, human capital theory and property theory; the empirical research part, mainly introduced the domestic and foreign research conclusions which is about the actual effect of equity incentive. Besides, the author also analyzes the current situation on the implementation of equity incentive. Chapter II is mainly about interests balancing in the management equity incentive, the author, firstly, summarized the problems of management equity incentive, then analyzes the causes of imbalance of interests, and finally Put forward some suggestions which are helps to balance the interests of managers, shareholders and the company. Chapter Ⅲ is mainly about interests balancing in employee stock ownership plan, First of all, the author made some comments on the dispute of employee stock ownership plan, then summarized the main problems of the implementation of employee stock ownership plan, finally the author puts forward some targeted advice. The last part of this article is conclusion and prospect, in this part, the author not only summarized research results, but also forecasted the future development trend of the equity incentive.On the basis of in-depth study, this paper draws the following conclusions:Compared with the private listed companies, in the process of the implementation of equity incentive, the state-owned listed companies face more constraints and obstacles. Studies have shown that when State-owned listed companies to implement a management equity incentive plan, it will be confronted with the following problems: First of all, it faced many institutional barriers; second, design of equity incentive plan is not reasonable, thirdly, equity incentive measures are not perfect. The author argues that self motivation and incentive shortage is the main cause of unbalanced interests. The author thinks that some necessary measures should be taken to protect the interests of the company and shareholders, such as, setting up state-owned equity trust system, strengthen the supervision of the company and making a perfect equity incentive plan. To protect the interests of the managers, the government should clarify the identity of managers of the state-owned listed companies, establish the market management mechanism and improve the supporting measures. The study also found that in the employee stock ownership plan, single source of funds, lack of preferential tax policies, employees take excessive market risk is restricting the state-owned listed companies to implement employee stock ownership plan. In order to promote the implementation of employee stock ownership plan, the author suggests that government should further broaden the source of funds, formulate preferential tax policies, and try to explore the use of stock options as the tool of employee stock ownership plan.