The Study Of Fiberhome's Two Equity Incentives

Equity incentives are considered to be an effective way to balance the interests of shareholders and managers.Modern enterprise theories and western capital markets are also proved by practice.Compared with Western countries,the implementation of equity incentives in China is relatively slow.Under the continuous improvement and regulation of China's relevant system laws,the practice of equity incentives has gradually matured,and the number of the enterprises which learn and prepare for the implementation of equity incentives has increased.As an outstanding state-controlled listed enterprise in China's information technology industry,Fiber Home announced plans for two equity incentive schemes in 2007 and 2014,which aroused tremendous concern and discussion.This article takes Fiber Home as a case company.Firstly,it analyzes and discusses the two phases of the equity incentives from the incentive model and incentive motivation and classifies the corresponding types.According to the results,We can confirm that the first period is the incentive stock option mode equity incentive,and the second period is the welfare restriction stock model equity incentive.Subsequently,combining the internal and external environment in which the company announced the two draft equity incentive plans,we discuss the reasons why the company makes the different choices of the two equity incentives.Finally,the economic effects of the implementation of the two equity incentives are evaluated and analyzed from two aspects: accounting performance and market reaction.The study found that cash flow and growth are important factors affecting companies' choice of incentive model,and the type of incentive motivation is reflected by the subjective intention of its planners.Different types of equity incentives will bring different economic effects to the company.Fiber Home's first equity incentive performance in the accounting and market response are both better than the second.Through the comparative study of these two equity incentives,we hope to provide reference for other listed companies that are ready to implement equity incentive.