Case Study Of YG Company Equity Incentive Plan

Equity incentive is a medium and long term incentive system,originated in the United States in 1950 s.The equity incentive system of Chinese enterprises began in 1990 s.With the development of the split share reform in 2005,more and more Chinese enterprises began to implement the equity incentive plan.However,due to the lack of scientific system design and effective implementation,some companies' equity incentive plans were premature,disrupted,or failed to achieve the desired results.The situation is also common.This article selects the A share listed company YG company as the research object,YG company is a high-tech enterprise with the development and sale of the power industry financial management software as the main business.YG company has implemented a number of equity incentive plans since 2009.This paper will take the equity incentive plan as the main research object in 2014.The main consideration is that the two restricted stock unlock periods in the stock incentive plan in 2014 are all unlocked and the company's performance is declining obviously.The brain drain is serious and its problems are most prominent and most representative.In 2014,the time is close to the present time.At the same time,the company related data of the year included in the incentive plan have basically been published.It can make a more objective and comprehensive analysis on the equity incentive plan in combination with the implementation effect,so as to ensure the timeliness of the research.And the comprehensiveness of the data.This paper mainly adopts the method of case study.The full text is divided into three parts.The first part is a case description,which mainly includes company introduction and introduction of the content of equity incentive plan in 2014,and compares it with the former equity incentive plan of YG company.Then,a typical case event is described in the process of generation and implementation of the equity incentive plan.The second part is the case analysis.Based on the principal-agent theory,human capital theory and incentive theory as the theoretical basis,combined with the case events described in the previous part,this paper analyzes the problems existing in the equity incentive plan of YG company and the reasons for these problems.The third part is the countermeasures and suggestions,aiming at the problems analyzed in the first two parts,from the purpose of equity incentive,the setting of incentive objects and the number of incentive,the choice of incentive mode and the setting of unlocking conditions in four aspects.I hope this article can help YG company to improve the design and implementation of the future equity incentive plan,so as to get a better incentive effect and provide some reference for the equity incentive plan of our enterprises.