Research On Employee Stock Ownership Plan Of A Company

It is clearly pointed out that “employees of the mixed ownership economy is allowed to hold shares to form a community of interests between the capital owners and workers” by Decision of the Central Committee of the Communist Party of China on Deepening Major Reforms passed by The Third Plenary Session of the 18 th Party Congress."ESOP"(Employee Stock Option Plan,referred to as ESOP)was first appeared in the Central Committee documents of the Communist Party of China,which not only affirms the positive significance of the ESOP,but also illustrates that how to solve the problem of the relationship between the company and employees better is the core of corporate governance in the future.ESOP is a long-term incentive system in which the enterprise employees holding shares or equity in some way,thus sharing the surplus,and participating in the management of the enterprise.Employee stock ownership plan has the dual effects of economic incentive and corporate governance,which is a kind of institutional arrangement for the owners and employees to share the ownership and the right of the future.It can enhance the enthusiasm of the employees for the enterprise,bring the corporate with the future,sustainable income,and stabilize the long-term development of enterprises.Enterprises are most concerned about performance,for only by a good performance can the enterprise survive.Based on the performance of the enterprise,ESOP is to make theemployees reach an agreement with the shareholders concerning the interests,to encourage the employees to input the human capital continuously and steadily,and to promote the realization of the team cooperation.At present,there are a large number of scholars at home and abroad studying the impact of ESOP on the corporate performance.Most scholars believe that ESOP can mobilize the enthusiasm of employees,and ultimately achieve the purpose of improving corporate performance.Based on the theories of motivation and employee stock ownership,this paper takes A company as the research object,using literature research method,investigation interview method and case study method.By analyzing the status quo of A company by SWOT method,and the governance structure and incentive mechanism of A company,this paper finds out that although A company developed a relatively perfect salary system and performance appraisal system,the incentive effect is limited.On the contrary,these systems increased the employee's short-sighted behavior,and the personnel structure of A company is also not stable.As a long-term incentive system,the core of ESOP is to avoid short-term interests of employees by activating the short-term wage income of employees into long-term interests.Therefore,in order to improve the present incentive mechanism of A company,according to the actual situation of A company,this paper designed an ESOP scheme for A company.Following the design principles of long-term incentives,profit sharing,equal ownership and fair distribution,it intends to form a non-public offering of stock,all the staff to participate in the object.In the implementation,it adheres to the principle of legal compliance,voluntary participation and risk at our own,and designs a feasible ESOP and practical implementation steps.This paper argues that A company's implementation of ESOP can stimulate the enthusiasm of employees,make the individual goals of the employees and that of the company united,thus improving the performance of the company,and promoting the long-term development of the company.It is hoped that through this study,a feasible incentive scheme will be proposed for A company to improve the performance of itsemployees.And it is also expected that this study will provide certain reference for other same or similar types of enterprises in implementing ESOP.