Research Of Public Company’s Equity Incentive Plan Design And Implementation Effect

Equity incentive can alleviate two rights separation between management and shareholders of the increasingly prominent problem of agency; nowadays, it has become a long-term winning trump of enterprises to attract and retain top talent. However, it takes our country only decades to formally introduce equity incentive, so the implementation effect of equity incentive has been controversial in academic world.This paper gives a general overview of equity incentive model, elements and its theoretical basis, and sums up the equity incentive plan elements and the incentive effect of the related literature, and expounds the evolution of the listed company equity incentive system in China. Then, combined with theoretical knowledge, case analysis and financial analysis, it analyzes two equity incentive scheme designs of YG; meanwhile, it deliberates the implementation effect of them from the aspects of market performance, financial performance, company brain drain, and scaling down or abandoning subscription for shares. The study finds that:firstly, incentive object in the restricted stock incentive plan is on the high side, but awarded market capitalization is on the low side. It reduces the incentive intensity, weakening the incentive effect; secondly, two equity incentive periods are less than five years, which is too short; thirdly, two equity incentive performance indexes setting are onefold, and the targeted values are low;Fourthly, two equity incentive lack of incentives in receivable money off.The research results of this paper will be helpful for the listed private enterprises which are to implement equity incentive in our country by offering them reference. By combining their own characteristics, they could formulate their effective incentive schemes. It verifies the validity of the present related laws and regulations, and modifies the equity incentive mechanism in China.