Research On The Equity Incentive Effectiveness Of DH Company

With the vigorous development of modern enterprises,the right of operation and ownership are constantly separated.Under this trend,equity incentive has been widely concerned and applied in listed companies.On January 1,2016,the "Management Measures for Equity Incentive of Listed Companies(Trial Implementation)" was formally implemented,which marks the curtain of equity system reform in China.After the stock reform,the number of listed companies implementing the equity incentive plan has increased,and the use of equity incentive in our companies has become more and more widespread.We have more than ten years of practical experience in China.The implementation effect of equity incentive and its scheme design have become the focus of theoretical and practical circles.Research has proved that equity incentive can bring some one-way or two-way effects to the company in some aspects.However,whether the implementation of equity incentive can really improve the value of the company and whether equity incentive can replace the traditional salary incentive method is still a problem that we need to further study.As a private enterprise listed in Shenzhen's small and medium-sized sector,DH company has expanded rapidly and developed rapidly since its listing in Shenzhen in 2008.After ten years of golden development,DH company has now become a leading company in security industry.During the development period,the company also encountered some problems,so the two equity incentive plans came into being.This paper mainly uses DH company as our research object,and uses the case analysis method,combined with the theoretical analysis of equity incentives and the actual situation of DH company to analyze the implementation motivation and equity incentive plan of DH company equity incentives,and analyzes the details in detail.The company issued two equity incentive plans and further analyzed the implementation effect of the company's equity incentive plan.It evaluates from three aspects:the market reaction is calculated and analyzed by the event research method on AR(abnormal rate of return)and CAR(accumulated abnormal rate of return)on the announcement date of DH company's equity incentive plan;The financial performance aspect is divided into two levels.The financial indicator analysis method is used to evaluate the change of financial indicators before and after the implementation of equity incentives from profitability,solvency,operational capability and development capability.In the horizontal direction,the efficacy coefficient method is used to compare the performance and overall ranking of DH company and five reference companies.Then,based on the elements of incentive objects,performance evaluation indicators and unlocking deadlines,DH company's equity incentive plan is analyzed.And put forward relevant suggestions in combination with the case.Through the above research,the paper concludes that the first equity incentive of DH company is more obvious to the company's performance than the second time.The main contribution of this paper is to study the impact of DH company's equity incentives on the company's performance from the perspective of case analysis,fill in the shortcomings of previous research,and conduct a targeted analysis of the design elements of the company's two equity incentive schemes.Finally,it summarizes the one-sidedness of the design elements of DH company's equity incentive plan and the problems that need attention,and provides exploration experience for other companies to implement equity incentives,so that the positive effects of equity incentives can be fully utilized.