Case Study Of Wangsu Employee Equity Incentive Program

Equity incentive originated in the United States last century 50's, Its purpose is to solve the problem of agency by agreement between shareholders and managers. Because it can connect the interests of the operators and the interests of shareholders. It can reduce the agency costs due to the different goals between the operators and the investors to some extent. For such an effective corporate governance, already prevalent in the West. In our country, the equity incentive is still in the trial stage. As an effective incentive to retain the core talents, more and more public company began to pay attention to equity incentive and implement it, especially after 2009, a large number of public companies began to publish equity incentive draft. The numbers of companies that issued a equity incentive notice add up to 682 by 2014, although the equity incentive plan is on the rise, but only 157 public companies completed the equity incentive. It shows when equity incentive is popular in companies,it also has brought a large degree of implementation difficulty.Wangsu has rollouted two equity incentive plans and implemented them in 2010 and 2011. Recently,it has also rollouted two equity incentive plans in 2014 and 2015. It can be see that wangsu is adept at implementing equity incentive. Through the analysis of the equity incentive plans of Wangsu, it can provide valuable experiences for the information technology industry in China public companies.This paper takes the equity incentive plan of Wangsu as an example. First this paper summarized the equity incentive motivations according to the information of Wangsu, that is, equity incentive is expected to bring the positive effect to the company. After that this paper continue to analysis the company's equity incentive effect, mainly from the operating performance, incentive target and core competitiveness. And finally to think about the advantages and disadvantages of the continuous equity incentive plans. And accordingly, it comes out the corresponding methods to avoid weaknesses.