A Study On The Design And Implementation Effect Of Equity Incentive Plan Of Listed Companies

Equity incentive,which grant shares of the operating company to the operators,allow them to participate in the company's management and risk as shareholders.With the development of China's economy and the implementation of equity division reform in 2005,the equity incentive policy was promulgated.As a result,the Chinese listed companies were able to implement the equity incentive to create the more favorable conditions.However,the understanding of equity incentive in China's capital market is still in the early stage of development.Due to the differences of the listed companies in the industry and the development level,not all of the listed companies who implemented the equity incentive has achieved remarkable results.According to the development level of enterprises in different periods,how to choose the suitable type of equity incentive for listed companies has become the focus of scholars and enterprises.Many scholars have made great efforts,and the final research theory has become an important basis for the implementation of equity incentive.ZTE is one of China's largest listed companies in communications equipment.It announced two equity incentive plans in 2006 and in 2013 respectively.On the basis of theory of company life cycle,this paper compared the two equity incentive methods.Through the research,we found that in the process of continuous development,the equity incentive plays an important role.In order to get a better understanding of the relevant information,this paper will analyze and evaluate three aspects: financial performance,market performance and personnel changes.The results show that the equity incentive has positive effect,and the choice of equity incentive model is appropriate.In order to improve the staff's' work enthusiasm and enhance the competitiveness of enterprises,enterprises in the mature stage adopted the way of restricted stock and the enterprises in the growth stageadopted the stock option incentive,which was consistent with the results of earlier researches and scholars.At the same time,the enterprises should focus on the incentive factors of equity incentive plan,especially choose reasonable incentive factors based on the objective conditions of the enterprises.