Case Study Of Dabeinong Group's Equity Incentive

As the basic industry of the national economy,agriculture has an important influence on the operation of our national economy.However,the agricultural industry has the characteristics of long payback period,high uncertainty in production and sales,and high degree of product homogenization.Meanwhile,the agricultural listed companies in our country still face the problems of imperfect governance structure and serious brain drain.These factors restrict the long-term development of agricultural companies to some extent,and the equity incentive system can alleviate the agency conflict between shareholders and managers,increase the attraction of the company to talents and reduce the short-sighted behavior of the executives,so as to provide a favourable condition for the development of the company.As an agricultural listed company,Beijing Dabeinong Technology Group Co.,Ltd establishes a community of interests through formulating and implementing the equity incentive plan,which can serve as a positive reference for other agricultural listed companies.This paper mainly adopts the method of case analysis research,which has introduced the industry background and the basic situation of Beijing Dabeinong Technology Group Co.,Ltd,and has analyzed the essential factors of the equity incentive plan of Beijing Dabeinong Technology Group Co.,Ltd.Besides,This paper discusses the main motivation of implementing equity incentive of Beijing Dabeinong Technology Group Co.,Ltd.Then,this paper analyzes the effects of the equity incentive plan: as to the incentive targets,the leaving rate of workers of Beijing Dabeinong Technology Group Co.,Ltd was low,and in the first and the second exercising period,the incentive targets could be motivated materially;as to the company performance,it did not reach the exercising standard in the third exercising period,and in comparing the operating situation of Beijing Dabeinong Technology Group Co.,Ltd with New Hope Group and Wellhope Agri-tech Joint Stock Co.,Ltd,it was found that although the profitability of Beijing Dabeinong Technology Group Co.,Ltd was better than the othertwo companies after the implementation of the equity incentive plan,there was no improvement of the company's operating ability,and it was likely that there was a shortage of funds of the company;as to the stock market performance,from the first release of the equity incentive plan to the end of the first exercising period,Dabeinong's share price movement was stronger than markets,while the company's share price in the capital market showed an indifferent performance in the second and third exercising period.On the basis of the above analysis,it is found that there are some problems of the equity incentive plan,such as single exercising index,no improvement of company's operating ability,too high exercising standards and too short waiting period of exercising rights.This paper puts forward some suggestions,such as to formulate detailed performance indicators,to improve the standards of the exercising rights,to improve the waiting period of exercising rights and to perfect the functions of the independent board of directors.Finally,considering the general characteristics of China's agricultural listed companies,this paper draws inspiration about formulating and implementing the equity incentive plan for listed agricultural companies.