Comparative Analysis Of Incentive Modes Under The Background Of Strategic Transformation Of Suning

Separation of two rights is one of the characteristics of modern enterprises,which leads to the generation of agency problems.Incentives to employees to converge their interests with those company owners are considered as one of the ways to solve the agency problems.The company will decide the incentive mode and scheme,according to its own situation,and At present,there are two common incentive modes: equity incentive and employee stock ownership.Since the CSRC issued the "Management Measures for Equity Incentives of Listed Companies(Trial Implementation)in 2006,many companies have adopted equity incentives to motivate specific employees for a long time.However,listed companies in China have met some problems in the process of implementing equity incentive.Because most of them have not fully investigated and understood the internal and external environment of enterprises and anticipated the risks that enterprises may face in the future and designed unreasonable equity incentive schemes,which have led to the failure of equity incentive or the unexpected effects.Then,more and more enterprises have sought for more incentive schemes and changed incentive modes.In 2014,CSRC issued the Guidance Opinions on the Pilot Employee Stock Ownership Plan of Listed Companies,which provided the legal basis for the implementation of the employee stock ownership plan of listed companies,the market responded warmly to the implementation of the employee stock ownership plan.Comparatively speaking,equity incentive is more focused on incentive,while employee stock ownership plan is more focused on benefits sharing and risks sharing and more flexible to implement,making companies and employees a community of interests and stimulate employees' enthusiasm,improve company cohesion and market competitivenessAt present,the research on equity incentive and employee stock ownership plan in our country mostly focuse on the influencing factors,performance management and so on,which seldom combine the company's strategic development with employee incentive.This paper attempts to find out the influence of corporate strategic transformation on the choice of incentive mode and incentive scheme setting through case analysis.It takes the retail giant Suning as the research object,taking different incentive modes for employees before and after the strategic transformation as the research object,because Suning is not only very representative in strategic transformation,but also has research significance in the choice of incentive modes.Suning originally occupied the leading position in the traditional electrical retail industry,but with the increasingly fierce market competition and the tremendous impacts of "Internet e-commerce",Suning realized the necessity of strategic transformation.Then Suning began to explore the transformation in 2005,launching Suning Online Mall,the launch of Suning Easy-to-buy online platform marked the formal beginning of the transformation in 2010.In the process,Suning determined to develop in the full-category internet retail area and gradually established the new mode of integration of online sale and offline sale,which pointed out the direction of the full-category internet retail strategic development of Suning.The company's strategic transformation is accompanied by incentives for employees.Before the strategic transformation,Suning implemented equity incentive plans in 2007,2008 and 2010 respectively,which all failed.With the implementation of the strategic transformation,it changed the incentive mode in 2014,choosing employee stock ownership plan,and successfully implemented.By analyzing these processes,we can explore the relationship between the strategic transformation of the company and the choice of incentive mode,and analyze the reasons for the failure of equity incentive and the successful experience of employee stock ownership plan.Lastly,the author puts forward opinions on how to choose the incentive mode and how to optimize the scheme,which can be used for reference by Suning and other enterprises.There are six chapters in this paper,the first chapter is the introduction,pointing out the research background and significance,and reviewing the literature related to strategic transformation,equity incentive and employee stock ownership plan;the second chapter is about the theoretical overview,discussing the relevant concepts and connotations,and putting forward the relevant theoretical basis of the motivation and effect analysis of this paper;the third chapter is the introduction of the research case,introducing the strategic transformation of the company in detail;the forth chapter is about comparative analysis of the motivations of equity incentive and employee stock ownership plan under the strategic transformation of Suning,and finds out the different motivations of different incentive plans in different strategic development periods;the fifth chapter then analyses and evaluate the implementation effects of employee equity incentive and employee stock ownership plan mainly from financial performance,non-financial performance and market indicators,which points out the impacts of incentive plans on the company's strategic development separately and evaluates the two incentive plans;the sixth chapter summarizes the lessons from the failure of equity incentive and the successful experience of employee stock ownership plan,draws relative conclusions,making suggestions for the choice and elements of contract setting of incentive mode,and put forward the shortcomings of this paper and the prospects for the future at last.