Case Analysis Of Restricted Stock About Design And Incentive Effect On Hikvision

Equity incentives are patterns for companies taking part of their equity to motivate employees.Generally speaking,equity incentives are subject to certain restrictions,only employees who meet the restrictions can exercise their rights.Equity incentives can effectively improve employee's loyalty by the combination of corporate interests and employee benefits.In foreign countries,equity incentives have been implemented for decades and the companies have a well-established system.Besides,most companies can effectively implement incentive mechanisms.However,in our country,equity incentive implement started late and the stock option model was questioned after the financial crisis.At the same time,the restricted stock model has received everyone's attention,because the restricted stock model has lower costs for obtaining company stocks.Even if the stock price fluctuates greatly,the incentive object can still obtain the benefit in the secondary market and the incentive measures are still valid.At the same time,the exercise conditions of restricted stocks are more strict than other equity incentive models.Generally,the restricted stock required service years and specific performance targets.These targets are linked to employee's benefits,which can reduce the short-term behavior of management and making employee to spare no efforts for complete the target performance.Besides,the restricted stock can make employee focusing more on the long-term development of the company,this can promote the development process of the enterprise.In 2005,China implemented share-trading reform,more and more companies are willing to try this incentive method.At the same time,the country is further improving the laws and regulations on equity incentives.In 2006,the measures for the administration of equity incentives for listed companies(Trial)had been carried out.In 2016,the China Securities Regulatory Commission approved the Measures for the Administration of Equity Incentives of Listed Companies.The revision and improvement of the regulations means the progress of the market.In the fierce market competition of modern society,high-quality talents is the key to improve the comprehensive competition of high-tech companies.The demand for talents in high-tech companies is particularly strong.Therefore,this paper selects Hikvision as a case,which is the leading company in the security industry of high-tech companies.This paper using the BSC method to study the implementation effect of Hikvision's restricted stock incentive plan,conducting financial and non-financial analysis of the implementation results.Besides,drawing the conclusion that Hikvision's implementation of the equity incentive plan and summarize its experience and shortcomings.This paper analyze the implementation of Hikvision's restricted stock incentive plan by drawing on many documents and reports.According to the 2017 HIS,Hikvision's market share in the video surveillance equipment market is 37.94%,which is the number one in this market.Hikvision has implemented the restricted stock incentive plan since 2012 and has successfully implemented the three-term restricted stock incentive plan.This paper is divided into five parts.The first part is a literature review from the theory of equity incentives and the impact of restricted stocks on the company's performance.At the same time,because the follow-up performance research method uses the BSC method,therefore the research on the BSC is also reviewed.The second part is a theoretical overview of the restricted stocks and the BSC,including the introduction of related concepts and basic theories.The third part is the theory and practice,using case studies method to introduce the background,motivation,scheme design and implementation of the restricted stock plan.The fourth part analysis the effects of Hikvision's implementation of the restricted stock incentive plan.The paper using the BSC method,from the financial dimension,customer dimension,business process dimension and employee dimension.Finally,the fifth part concludes the conclusion and enlightenment of Hikvision's implementation of the restricted stock incentive plan for other companies.After analyzing the effects of Hikvision's implementation of the restricted stock incentive plan,,this paper believes that the restricted stock incentive plan bringing new developments for the company.Vitality,summarizing its experience and emphasizing the issues.Companies should select reasonable incentive targets and set appropriate exercise conditions in the process of implementing incentive plans.Besides,establishing a scientific internal supervision system to ensure the smooth implementation of incentive plans.This paper helps companies to optimize the design of their restricted stock incentive plans,providing reference experience for listed companies to implement restricted stock plans.