The Motivations And The Impact On Performance Of Employee Stock Ownership Plan In Listed Enterprise

With the increasing pressure of enterprise survival and other factors,it is difficult for enterprises to maintain high production efficiency.The continuous change of economic situation and the continuous development of society make it difficult for listed companies to deal with closed-door automobile manufacturing.It is unrealistic to deal with the problems brought about by these changes with the inherent system.Listed companies want to survive in today’s fast-changing market need to open their eyes,constantly adapt and change.The proposal of Employee Stock Ownership Plan opens up a new way for enterprises to solve the above problems.In China,ESOP has a long history.As early as the Qing Dynasty,Shanxi businessmen began to implement the system of "top-body stocks".In modern times,the employee stock ownership plan was introduced in the 1990 s,but because of the imperfect laws and regulations in China,it was suspended by the state until 2014.Although the implementation of ESOP by domestic listed companies has been approved,there are still many areas worthy of improvement.In China’s capital market,the employee stock ownership plans of listed companies are often not well designed in terms of incentives.Firstly,in terms of the proportion of shares of employees under the ESOP,except for the detailed division of some senior managers,other employees are often treated equally.The incentive effect of ESOP is severely weakened by the failure to distinguish the value that employees bring to the company and giving all employees the same incentives.Secondly,although ESOP is a long-term incentive measure,the lack of reasonable mid-term rewards for employees during the longer lock-in period will lead to employees’ slack mood.In addition to the imperfection of incentives,domestic enterprises often copy the ESOP plans implemented by successful enterprises in the market according to the texts,instead of designing the ESOP plans which are most suitable for the characteristics of listed companies according to their own characteristics.This problem also needs to be solved.Similarly,for the implementation of ESOP,the education and popularization of ESOP knowledge among the employees of listed companies and the continuing improvement of relevant laws and regulations are the areas that need to be paid attention to in ESOP.How to solve these common problems of ESOP in domestic capital market is the focus of this paper.This paper mainly uses two methods to study,namely literature research method and case analysis method.Firstly,through the study of relevant literature at home and abroad,analysis and induction.Find out what are the general motivations for companies to implement employee stock ownership plans.Through the study of the employee stock ownership plan of TGOOD Company,the motivation of implementing the employee stock ownership plan is found out.Through the changes of market environment and corresponding policies at that time,the external motivation of implementing ESOP is explained.The intensification of competition in the industry where the company is located and the encouragement of the national policy to TRED ESOP are introduced in detail.The internal motivation of employee stock ownership plan is explained by the benefits that employee stock ownership plan is expected to bring to the company through corporate governance.There are some reasons that employee stock ownership plan is chosen because of lack of liquidity,and employee stock ownership plan is chosen to retain core talents to enhance the competitiveness of the company,and employee stock ownership plan is carried out to motivate employees.Then the logical relationship between ESOP and company performance is refined.This paper analyses the reasons for the differences between the expected improvement of the company’s performance and the actual impact on the company’s performance,as well as the reasonable solutions.Subsequently,this paper takes the implementation of Employee Stock Ownership Plan by TGOOD in Qingdao as a case to conduct a practical analysis.According to the relevant production activities of enterprises,the motivation is analyzed.According to the financial report,the impact of ESOP on the production and operation of enterprises is analyzed.Through analysis and reflection,we can get the inspiration of the influence of TRED ESOP on enterprise performance,and give the corresponding suggestions.After analyzing and discussing the whole case,it is concluded that reasonable employee stock ownership plan is conducive to improving the performance of enterprises and the management level of listed companies,mobilizing the enthusiasm of employees,and deepening the reform of listed companies.At the same time,it is found that ESOP needs long-term incentives,but continuous incentives are also indispensable.For each company to carry out ESOP,it must be designed separately according to the company’s situation.This study can give some warning to the listed companies that implement ESOP in the market,and can get a preliminary estimate of whether the positive benefits will be produced after the implementation of ESOP in their own companies.At the same time,we use TGOOD Company as a case to discuss ESOP,find out the unreasonable parts of ESOP,and as an extension,find out the problems of ESOP in capital market,and provide some corresponding solutions for these problems,so that listed companies that implement ESOP can participate in the future.Test.