Case Study Of Performance On Equity Incentive Of China State Construction Engineering Co.,Ltd.

With the gradual expansion of development scale of enterprises,the ownership and management of enterprises began to separate.Then some managers started running the business from their own interests,and it brought many problems.In this context,equity incentive came into being.Equity incentive can make managers get considerable benefits,stimulate managers to work harder for the development of the company,thereby ensuring the maximization of the interests of the company.In Europe and the United States and other developed capital markets,equity incentive has been widely used and achieved good results.Chinese equity incentive started late,and compared with western countries,the theory and practice of equity incentive is relatively backward.Until 2006,with the completion of the share reform,and the relevant laws and regulations of equity incentives have been introduced,as well as the relevant market environment has become more and more mature,the enthusiasm of the implementation of equity incentive of listed companies gradually increased,a large number of listed companies have issued equity incentive policy,equity incentive in China has made great progress.However,in the equity incentive practice,due to the design of equity incentive plan is not reasonable,some companies eventually did not achieve the desired results.A number of companies were forced to stop in the process of implementation of equity incentive,even there have been a decline in performance in some companies.As one of the successful completion of the equity incentive enterprises and Chinese listed companies in construction industry,China State Construction Engineering Co.,Ltd(hereinafter referred to as the "Zhongjian Gufen")issued the first phase of the equity incentive draft in 2011 and the implementation of the first phase of the equity incentive plan in 2013,and began the implementation of the second phase of the equity incentive in 2016.The study of its equity incentive programs and the implementation of the program can provide a wealth of experience and inspiration for implement equity incentive of Chinese construction industry and other sunset industries.In this paper,I plan to research the equity shares of Zhongjian Gufen from a microscopic point of view.First introduce the concept and basic theory of equity incentive.on this basis,Iestablish a evaluation system.then I introduce the status quo and problems of equity incentive in Chinese construction industry and analyze the two equity incentive schemes.Finally I take financial indicators and non-financial indicators as the method of performance evaluation,take Zhongguo Tiejian and Zhongguo Zhongtie which did not implement the equity incentive plan and the same industry data as the example,analyze the Performance on Equity Incentive of China State Construction Engineering Co.,Ltd.The study concluded that performance on Equity Incentive of the company is basically effective.It Embodies in the promotion on the development of direct performance indicators and the growth capacity.I offer a proposal that Zhongjian Gufen should strict the performance evaluation index and increase non-financial performance evaluation index because of problems like that some assessment indicators being set too easy and not taking the non-financial indicators into account.Finally,it is suggested that the construction industry should pay attention to the establishment of a sound corporate governance structure,the cultivation of market-oriented personnel system,the establishment of a scientific incentive plan.