Research On Results Of ESOP Realized By Issuing Exchangeable Bonds

In this paper,we take Join Cheer Corporation as an example and introduce the details and characteristics of the Employee Stock Ownership Plan implemented by the company,in order to reflect the innovative measures of the current market for the implementation of ESOP.On the one hand,this paper enriches the case study of the employee stock ownership plan and validates the results of some previous empirical research.On the other hand,this paper also provides useful reference for the future implementation of ESOP in the market.This paper adopts the method of theoretical analysis and introduces the classical theory of two-factor theory to analyze the effects of ESOP.At the same time we introduce the uniqueness of the program undertaken by Joint Cheer,compare the advantages and disadvantages of different approaches.In addition,we also carry out detailed data analysis on the effect of the implementation of the program,involving the company's share price,total market value,profitability,growth capacity,financial leverage and many other financial indicators,used to measure short-term and long-term effects.As for the content arrangement,this paper first introduces the main elements of employee stock ownership plans,briefly summarizes the basic properties of exchangeable corporate bonds,and analyzes the advantages of combining the two.As a listed company in the software industry,we introduce the company's business and equity structure and other factors,to analyze the background and necessity of employee stock ownership program.We have described the details of the two methods used in the this program,and compared the advantages and disadvantages of the two methods to reflect the innovative measures on the implementation of the employee stock ownership plan on the market.After that,we conduct a data analysis of the company's short-and long-term impact on the implementation of the ESOP.The results find that,after the release of the ESOP,the short-term stock effect of the company was very obvious,the company's weekly stock returns were higher than comparable companies and broader market indices.At the same time the company's market value in the subsequent period of time showed a faster growth,but the company's market value growth is not to be maintained in a longer period of time.Finally,we find that in the case of the stock price downward trend,buying exchangeable bonds is significantly better than buying shares in the secondary market.The latter may lead to capital loss of employee stock ownership plans and of long-term incentive effect,while the former has the revenue of interest.So we believe that in the current market conditions,the purchase of exchangeable bonds is a very meaningful market innovation.At present,this approach is still in a very premature state,and there may be some legal issues that need to be standardized,but its ongoing attention and research is very valuable.Through case analysis,we validate some of the ideas presented in the literature.The innovation of this paper lies in discovering and analyzing the latest measures on the implementation of employee stock ownership plans in the market.At the same time,by introducing the implementation plan of the ESOP which is new on the market at present,it makes up for the current literature research and practices.In addition,by comparing the advantages and disadvantages of different approaches,we may shed some light for other companies in choosing which approach to use.