Case Study Of W's Equity Incentive Plan

As China has successively promulgated relevant laws,policies and management strategy on equity incentives,major listed companies have responded and consecutively launched equity incentive implementation plans,which means that these companies officially start the equity division reform.Equity incentives strategy aims to motivate corporate managers to promote the value and bring more benefits to the corporate itself by setting certain incentive targets and corresponding incentives.It has been proved that it is an effective internal governance method and also is an effective solution to the contradiction of principal-agent after its diffusion in these listed companies.However,because of the late implementation of equity incentives,it cannot be operated perfectly in Chinese market and many problems remain to be resolved.W company is a leading company in the real estate industry.It is the pioneer to implement the equity incentive plan among the listed companies in China and its implementation process has been closely watched by the outside world.Either the advance experience or shortcomings in the implementation plan formulation and challenges in the diffusion process provides great references for other companies,including listed companies in the both real estate and other industries in China in the aspect of equity incentives adoption.This paper takes the implementation conditions of the two incentive schemes conducted in W company as a case study and deeply analyzes the effects respectively.In the analyzing process,four aspects in W company are compared based on the industrial related average indicators,which are incentive models,implementation period,assessment indicators and financial impacts.Through evaluating the two schemes' implementation condition and result comprehensively,this paper proposes the improvement suggestions on the future equity incentives plan adoption in W company based on the challenges and barriers of the process.These proposals can be regarded as a reference for the other companies in the real estate industry and also be hoped to contribute for the perfection of equity incentive system in China.