A Case Study On The Effect And Implementation Of Fiber-home Equity Incentive Plan

The implementation of equity incentive in China of listed corporation start with 2006.Equity incentive is to align the interests of shareholders and managers,enabling our efforts to achieve the same objectives that maximize the value of the company,thereby easing the conflict of interest between shareholders and managers,agency problems.However,due to asymmetric information and multi-agency relationship of state-owned listed Corporation,equity incentive to become a tool for the state-owned enterprise executives for their own benefits.SASAC and the Commission had to suspend its approval and filing.Fiber-Home equity incentive stock option for the first time was born in such a background.It is also the first Central Enterprise whose plan got approved after the Regulatory authorities restart equity incentive.SASAC said it has a model role.Different from the first time,the second equity incentive is to use the way of restricted stock.After the announcement,the market gave a strong positive reaction,even stronger than the first time.Since the issues of the first draft has been more than 7 years.The company in June 2014 launched a second round of equity incentive plan.The empirical research shows that the market has a significant positive reaction to the stock option,while the restricted stock is not significant.The empirical research shows that the market has a significant positive reaction to the stock option,while the restricted stock is not significant.The second equity incentive is integrated into the elements of the balanced scorecard,and the use of restricted stock itself is more in line with the company's development stage,and it is expected to have better effect.Of course,the final effect is still need time to test.