Case Analysis Of East Company's ESOP

Employee stock ownership plan(ESOP)refers to an enterprise system arrangement that it permits employees to obtain shares or option and also the earnings,which could maximize employees' sense of ownership and organization commitment.From the date of birth,it attracts amounts of researchers',entrepreneurs' and government's attention.In the 1960 s,the ESOP was triggered by the continuous development of the enterprise system and the desperate need of the change in the traditional labor employment relationship.Since the 1980 s,in the context of state-owned enterprises reform,China has conducted some exploration and exertion on ESOP from both theory and practice.However,due to the lax specification and defective institution,amounts of the state-owned assets was sold to employees at very low price,even free of charge,which have neither essentially incentive effect nor achievement of ESOP original intention.Therefore,the CSRC suspended the employee stock ownership system.From 2013 to 2014,the state issued ‘Guidance about the listed company implementation of employee stock ownership plan' and such a number of policies and regulations which allow the eligible enterprises a trial in the ESOP.The policy promotes hundreds of listed companies' ESOP implementation.Before implementing ESOP,the company faces many difficulties such as intensifying competition in the domestic market and challenging the leading position in the industry.In this context,the company implemented ESOP.As a leading enterprise in the field of photo-voltaic energy,the case of the company is typical.The motivation of ESOP and the impact of the company's production and operation performance deserve our in-depth study.This paper is based on East company and adopts literature review method,case study method and longitudinal analysis method.The first part is the introduction that illustrates the research background and significance of this paper,summarizes the research literature of scholars according to different viewpoints,and expounds the research ideas and methods of this paper.The second part introduces the features,function and implementation of ESOP,which is the theory of the full text.ESOP has a wide range of application,and long-term incentive effect.To a great extent,it can avoid the losses aroused by the managers' short-term behavior based on their own interests.The third part analyzes the implementation of ESOP in detail.Combining all aspects of the background,it also introduces the basic situation of the company and elaborates the key points of the plan implementation.Focused on both macro and micro factors,it analyzes the motivation of ESOP from angles such as market competition,overseas development,relevant policies and regulations,competitive power of the company and long-term effective incentive mechanism.This part is the important research content in this paper because it lays a solid foundation for the corresponding countermeasures.The fourth part analyzes the influence of the plan on the various aspects of the company.Through the analysis of various indicators,we find that the company's ESOP has a positive and beneficial effect on the financial index,non-financial index and wealth effect of the company.The fifth part is the summary of the analysis of this article,and pointed out the author's own views.Through this paper about motivation and performance analysis of the East company's implementation of ESOP,the author draws the first conclusion that ESOP improves the company's short-term profitability,optimizes the company's financial structure and creates greater value for shareholders at the same time.The second is that ESOP design should be appropriate to local conditions and avoid the high leverage risk of capital source.