Dr.Peng Equity Incentive Effectiveness Analysis

The liberation of social productivity has brought about a rapid increase in the scale of the company,which has led to the issue of agency between the owner and the operator.The principal-agent problem exists extensively in all walks of life.In order to solve the principal-agent problem effectively,equity incentives have been widely used in the world in recent years.Equity incentive is a long-term incentive for the company's management to implement the company's management.By granting company management company shares or stock returns,the interests of both the principal and the agent become the same,resulting in an increase in company performance.To increase the wealth of shareholders.The foreign equity incentives have been implemented for a long time and the system is mature and perfect.China's equity incentive system is at the beginning and development stage,and the incentive effect is not obvious.In order to study the effectiveness of the equity incentive system and the factors that affect its effectiveness,it contributes to the maturity and perfection of the equity incentive system in China.This paper uses the case study method to analyze the effect of Dr.Peng's equity incentives.Effectiveness is closely related to the design of equity incentive plans and the conditions for exercise of equity.In this paper,the method of combining normative research with case studies is used to categorize relevant literature and theories of equity incentive research results,equity incentive models,and equity incentives at present.The characteristics and rise of equity incentives are also discussed.Motivation.This article selects Dr.Peng's equity incentive as the research object,focusing on the selection of Peng's equity incentive model,the background and motivation of the implementation of equity incentives,the scheme design of stock incentives,and the rationality of evaluating the stock incentive design,and reacting from the market(stock price),operating performance,incentives to stay in the situation to further analyze the effectiveness of Dr.Peng's equity incentives.Through the case analysis,the following conclusions are drawn:(1)Dr.Peng's equity incentive design is reasonable and rigorous.First,Dr.Peng uses a compound stock-based incentive model in which stock options and restricted stocks are combined,which not only retains the advantages of the two models,but also greatly reduces the shortcomings of the individual incentive model.Second,Dr.Peng's equity incentive partners have a wide range of participation.The compounded incentive model adopts a progressively increasing ratio of exercise rights,so that the incentive target can take into account the long-term interests of the company to avoid focusing on the immediate interests,diversifying exercise conditions,and having traditionally meaningful financial indicators,and adding indicators such as stock price changes and senior management retention;Finally,the exercise time is set reasonably,and the exercise time will not be too long or too short,which can achieve a good incentive effect.(2)The equity incentive effect is significant.After Dr.Peng's implementation of the stock incentive plan,the positive effects of equity incentives were demonstrated in market response(stock prices),business performance,and retention of incentive objects.The company's stock price showed a steady upward trend after the issuance of equity incentive announcements,and the operating results also significantly improved beforeand after the implementation of equity incentives,which drove Peng to gradually overtake the industry average to surpass the industry's overall level.Based on the conclusions of this paper,the following policy recommendations are proposed:(1)The rational use of the compound equity incentive model will enable the incentive target to quickly enjoy the benefits of the equity incentive plan,while also constraining the incentive target to obtain short-term benefits.(2)Set up a multi-jurisdiction appraisal system that takes into account the characteristics of the company,and when selecting appraisal indicators that are commonly used by listed companies,select indicators that meet the industry characteristics and company characteristics of their own companies;(3)The implementation of the right to pay attention to long-term arrangements,so that incentive objects focus on the company's long-term interests;(4)Choose the right timing(granting),according to the company and the development of the industry to determine the equity incentive plan.