Case Study On Equity Incentive Of JH Company

With the emergence of modern enterprise system,the basic structure of corporate governance evolves into the separation of ownership and management rights.Through the practice of many enterprises,it is proved that this organizational structure has certain advantages.However,as the scale of the company expands and the organizational structure becomes complicated,the disadvantages of separation of the two powers are gradually enlarged.First of al,shareholders of the company need to pay more governance costs,including executive compensation,supervision costs,etc.Secondly,the problem of insider control is becoming more and more obvious.The exploration of equity incentive of Chinese enterprises started late,and many incentive schemes of enterprises have various problems.In addition,due to the impact of macroeconomic changes,many schemes failed to achieve the incentive effect.Therefore,how to design incentive scheme is an urgent problem to be solved in China's equity incentive practice.This paper selects JH Company as a case study of equity incentive,mainly because JH Company is a leading enterprise in domestic cosmetics industry and has certain representativeness,and it has implemented multiple incentive schemes,which is useful to long-term analysis.Firstly,this paper sorted out the implementation background of equity incentive and the current research status.Then,on the basis of relevant theoretical research,this paper sorted out the relevant elements of an incentive scheme,and then made a comparative analysis of the content of JH Company's incentive schemes.Through analysis,this paper found that the defects of the schemes implemented by JH Company were more than the advantages,so the problems in the schemes and the reasons were summarized and analyzed,and relevant optimization suggestions were put forward.The analysis content of this paper,as well as the relevant suggestions obtained,have certain reference value for enterprises which intend to implement equity incentive in the same industry.