Legal Research On Employee Equity Incentive Under VIE Framework

With the advent of the era of knowledge economy,human capital has become a kind of more and more important labor resource.In recent years,employee equity incentive has become a popular human resource management system in enterprises.The equity incentive system originated from American companies in the 1950 s is not fangle,but this paper discusses the issue of employee equity incentive in such special enterprises listed or listing abroad.The particularity of this kind of enterprise is rooted in its complex legal framework,that is VIE framework,which makes the employee equity incentive produce some more unique legal risks and problems,and that's just the core of this paper.Because of the complex structure design of the VIE framework,it acts as a bridge between the inside and outside of the country,and the equity incentive structure based on the framework is different from the general domestic equity incentive.Therefore,this paper first briefly analyzes the equity incentive mode and shareholding structure under the VIE framework,and finds it is different from the general domestic equity incentive in external management registration,founder control,management cost and other aspects.Based on this,this paper further discusses the risks and disputes that employee equity incentive may face when the VIE framework exists and is dismantled.Through a series of case studies,the paper focuses on the legal disputes of the VIE framework,the unequal substantive legal status of both sides,the dislocation of the subject of legal relations,the potential risks brought to employees by foreign exchange and tax issues,as well as the qualitative analysis of equity incentive after disputes,the procedural obstacles of legal rights protection overseas,etc.From the discussion of the third chapter,it can be seen that in the process of equity incentive,the risk faced by the employee side is multiple,which is not only owing to the unreasonable design of the equity incentive system itself,but also related to the particularity brought by the VIE framework.VIE framework arises from China's special historical background and has the character of avoiding supervision.Its own internal risk and external policy and legal risk aggravate the instability of this framework and bring more uncertainty to the issue of equity incentive under this framework.Therefore,in the fourth chapter,by reviewing the development process of this framework,combing the regulatory ways and variation trend of domestic and foreign regulatory authorities,so as to further analyze the impact on employee equity incentive under this framework under the change of domestic and foreign legal environment.From the analysis of the third and fourth chapters,it can be seen that the problem ofequity incentive under the VIE framework is indeed special.The risks faced by employees are more diversified,and it is more difficult to safeguard legal rights when disputes occur,therefore,how to solve disputes so that better implementing the equity incentive system becomes an new problem brought by economic development and needs a comprehensive strategy.Employees themselves should strengthen the awareness of risk prevention,and enterprises should pay more attention to the fairness and transparency of system design,meanwhile,VIE's legal supervision needs to be clear,and information disclosure system,cross-border dispute resolution mechanism and related supporting systems need to be constantly improved.