Case Study Of A Securities Company's ESOP

With the publication of “Guidance of Listed Companies ESOP pilot”, the number of ESOP reached a new high. But the problems and solutions of ESOP hasn't been completely research, the practice of ESOP needs effective theoretical support. So the research of ESOP may be helpful for Chinese ESOP.In order to improve the incentive and restraint mechanisms, retain talents and enhance the investors' confidence, company A designed the ESOP. The program has no structured finance, high participating point, long duration. Generally speaking, the program is complete, meets the targets of ESOP. But the question rise: lack of incentives, non-institutionalized and no long-term oriented, company A should improve the rate of return, help the holders establish a health investment ideology, and improve the regulations.In order to study ESOP systematically, we compare ESOP with other equity incentive means, and found that ESOP has fewer restrictions, broader scope of applications, diverse source of funds and less tax. Then using least square method factors analyzed the maters which influnce ESOP. Then found that leverage, the percentage of common staff subscribe and the growth company had nothing to do with the size of ESOP, but performance, stock price and industry matters significantly. With the analysis above, we give suggestions to the ESOP of listed companies in China: provide more ESOP manners, institutionalized and long-term oriented, encourage ESOP participation in corporate governance, and improve the convenience of the implementation of state-owned companies, etc.