UFIDA's Equity Incentive System Design And Its Effects

The equity incentive of enterprises in our country sprout in the early 1990 s and has experienced three different stages of development.At present,it has entered the golden period of development,especially in recent years,the companies that conducted equity incentive have had explosive growth.From the state-owned listed companies,private listed companies,down to entrepreneurial enterprises,small and medium-sized enterprises,equity incentive as a tool to attract and retain talent,has been widely used.The equity incentive system was first born in the United States in the 1950 s,flourished in the West in the 1970 s and 1980 s,and spread to various parts of the world in the 1990 s.Its background is mainly focused on solving the problems caused by principal-agent.Its aim is to realize the convergence of the interests of management and shareholders,and encourage management to work hard.There are many problems in the application of the equity incentive system in China.For example in the aspect of the design of the equity incentive system,the research shows that the performance appraisal index is single,which is not enough to reflect the implementation effect,and the performance appraisal index is set too low,which is the means to cut out the interests of the hollowed-out company,and the incentive validity period is too short and has no effect of long-term incentive.The design of the elements of the enterprise equity incentive system is different,and the degree of the improvement of the enterprise performance is also different.This article selects UFIDA as the research object.It firstly describes the relevant theoretical basis of equity incentive and then describes the current situation of equity incentive of listed companies in China in the aspects of the number and industry distribution and the mode selection,and the motivation of implementing equity incentive is analyzed based on the development history and company background of UFIDA.It also describes the four equity incentive plans and its implementation in detail.Finally,using case analysis and comparative analysis,from the profitability,operational capability,debt repayment ability,development ability,market reaction,R & D capabilities and personnel mobility,the paper analyzes the effect of the equity incentive of UFIDA,and evaluates equity incentive system.Based on this case,the inspiration to the equity incentive system of listed companies in China is concluded.Firstly we should optimize the design of the equity incentive system.To a large extent how to design the equity incentive system determines the effect of the implementation of equity incentive,and the incentive object,incentive mode,performance indicators,exercise price are important institutional elements.Secondly to improve the internal governance structure of the company,orderly and efficient internal governance structure lays the foundation for the effective implementation of equity incentives.Finally,the effectiveness of external capital market should be increased.