Analysis On The Effect Of Equity Incentive In Gemdale Group

As an important incentive for modern enterprise management,equity incentives began in the 1950 s and was gradually used by western countries in corporate governance and achieved good results.As a long-term incentive mechanism,equity incentives work as follows: the incentive object must accept the corresponding conditions when accepting the equity rights granted by the company.In this way,the company becomes the owner of the company and actively participates in the company’s relevant decisions.Fully mobilize the enthusiasm and creativity of these people,and guide them to unify their personal goals and company goals,and achieve the common development of the company.Equity incentives enable managers to regard themselves and the company as a community of interests through conditional and differentiated incentives,which can solve the principal-agent problem to a certain extent and thus reduce the agency cost of the enterprise,thereby maximizing the value of the enterprise and the long-term.Stable development.Based on the literature on equity incentives,this paper analyzes the motivations and schemes of implementing equity incentives based on principal-agent theory,managerial rights theory,and incentive theory.In order to verify the implementation effect of the equity incentives of Gemdale Group,this paper analyzes the changes of financial indicators and non-financial indicators before and after the implementation of equity incentives by Gemdale Group.The industry average value,the non-enforcement equity incentives Greenland Holdings and Gemdale Group were selected for financial indicators analysis.The indicators used were profitability,solvency and development capability.The event research method was used to analyze the market reaction of the changes in the stock price before and after the announcement of the equity incentives by Gemdale Group.The non-financial indicators were analyzed through the comparative analysis of the changes in the number of investors and the market share of Gemdale Group.Finally,the evaluation of the equity incentives of Gemdale Group was carried out,and the successful experience and shortcomings of Gemdale Group’s equity incentives were summarized.Suggestions were made for the problems of the Gemdale Group’s equity incentive plan and its implementation process.The research in this paper finds that the short-term performance of Gemdale Group hasbeen significantly improved through the implementation of equity incentives.The two key indicators of ROE and net profit growth rate in the exercise conditions have also increased significantly,and the exercise conditions have been successfully achieved.However,it should be pointed out that Gemdale Group also has some limitations in the implementation of the equity incentive plan.For example,the long-term performance of the company has not been significantly improved,and the performance appraisal indicators are too single.It is recommended to improve by improving the proportion of core talents’ share allotment and improving the evaluation criteria.It can provide reference for companies that want to maximize their value through equity incentive plans.effect to determine the rationality of the plan,and then the problems in the Gemdale Group equity icentive plan were put forward and the optimization suggestions were put forward,and hope to provide reference for enterprises that plan to implement equity incentives to maximize corporate value.