The Motivation And Market Reaction Of ESOP In China

Employee Stock Ownership Plan(ESOP)is a system in which employees can participate in the creation of value and wealth.The employee shareholding program can link the employee’s personal objective function to the company’s objective function to help the company retain employees,attract talent and motivate employees,and employees can share the company’s residual income on the other hand.In 2014,China Securities Regulatory Commission issued a "guidance on the implementation of employee stock ownership plan of listed companies guidance"(hereinafter referred to as "guidance"),China’s listed company employee holdings plan system ushered in the development of blowout.But also for the study of employee stock ownership plan implementation and market response to provide inspiration and data support.This article selected from 2014 to 2015,the staff holding plan announced 326 listed companies as the object of study.Using normative analysis,empirical analysis to study of China’s listed companies employee stock ownership plan implementation motivation and market response.The results show that: First of all,the characteristics of listed companies will affect the implementation of employee stock ownership initiatives.Which the nature of equity and growth opportunities are important factors.Compared to state-owned enterprises,non-state-owned enterprises will be more motivated to implement employee stock ownership plan;In addition,compared to smaller growth opportunities,growth opportunities for listed companies will be more motivated to implement employee stock ownership plan.Second,employee holdings can cause significant market reactions and respond to positive markets.It shows that the investors of our country are optimistic about the employee stock ownership system,hoping that the listed companies will attract and retain the talents through the employee stock ownership plan,and improve the corporate governance structure,and finally enhance the economic efficiency of the enterprises and improve the return on investment.Finally,the different employee shareholding plan of the contract elements on the impact of the market reaction is not the same,the greater the proportion of employee holdings,the greater the positive market reaction;employee stock ownership plan from the non-public offering of the positive the greater the market reaction.On the basis of empirical research,this paper puts forward some suggestions and suggestions on how to perfect the employee stock ownership plan system of listed companies from two aspects: enterprise level and supervision level.At the enterprise level,state-owned enterprises can implement the "mixed ownership reform" through employee stock ownership plan.In addition,enterprises should implement employee stock ownership plan according to the actual situation,and cannot follow suit.From the regulatory level,the SFC and other regulators need to establish short-term window guidance,and supervision on the employee stock ownership system information disclosure situation,and finally combined with the specific circumstances to further improve the staff shareholding system contract elements,making the staff holdings system better Play a role.