An Empirical Study On Equity Incentive Of State Controlled Listed Company A

Equity incentive originated in the United States.With the development of global financial markets,equity incentives were widely implemented in many enterprises all around the world,which became the globalizing incentive mechanism.In the early 1990s,Chinese domestic enterprises began to learn from the Western equity incentive company management gradually.Subsequently,the state-owned enterprises in China are constantly adapting to changes in the market,and starting to realize the importance of performing equity incentive to top-managers in the gradual process of two rights separation and deepening the reform of joint-stock.The administrative identities of top managers in state-owned enterprise gradually blurred,and turned to focus on professional managers or service agents who were related to incentive and examine issues.Since 2005,the securities and futures commission,state-owned assets supervision and administration commission,the ministry of finance and other relevant departments issued a series of laws and regulations,which cleared obstacle for equity incentive system,and made it possible to improve the equity incentive mechanism in listed company.However,due to its special nature of state owned enterprise,the examination and approval of the equity incentive program were more strictly.The audit and supervision will come from the two aspects of the SFC and the SASAC,equivalent to use market-oriented approach to state-controlled listed companies in equity incentive,and the company should meet the constraints of state-owned enterprises as well.Since formally implemented in 2006,state owned enterprise fall behind compared with the private listed companies both in quantity and development speed.Meanwhile,the state holding listed company's equity incentive system in China still need to be improved.This paper is to discuss the state holding listed company equity incentive as a starting point,elaborated the related concepts and theories of equity incentive such as the stock options,virtual stock,restricted stock,stock appreciation right,performance stock,employee stock ownership plan for details.Aiming at the situation of our country,the characteristics of the state holding listed companies in China and analyzing the present situation and problems of equity incentive.State holding listed company have the following characteristics:(1)the proportion of state-owned holding companies in the equity ownership structure occupies a considerable proportion,the equity ownership structure is relatively concentrated(2)The state-holding listed company plays an important role in national economy,takes the responsibility of the value of state-owned assets(3)with the original characteristics of state-owned enterprises and corporate,the management of the company still takes with thick administrative color(4)the incentive constraints mechanism is outmoded and not sound.For the state-owned listed companies to implement the equity incentive,the main conditions are strict and the operation is very complicated.Of course,the prudent thinking of state-owned assets management is understandable,it can avoid the loss of state assets,out of control of management and other issues.However,in the harsh management approach,it can not arouse the enthusiasm of state-owned enterprises to stimulate the implementation of incentives and their management innovation.During the announced incentive plan of A-shares equity listed companies,the state-controlled enterprise only took about 15%of the all implementation which is not that match the proportion it takes in the whole market.This paper also takes A company as an example,takes the actual case as the research object,elaborates the design of the equity incentive scheme implemented by Company A,and analyzes the final implementation effect.At last,discusses the obstacles to the implementation of equity incentive by state-controlled listed companies,such as the immaturity of the stock market,the lack of reasonable exercise condition design and the scientific performance evaluation system,and find out the existing problems and analyze the reasons.Finally,combines the situation of the development of A company and the particularity of ownership,the article put forward practical and effective measures for the implementation of equity incentive plan in the future,and provide reference for enterprises with similar needs to implement equity incentive and perfect the design idea of equity incentive.