Study On Equity Incentive Scheme And Implementation Effect Of DA Company

As a medium-term and long-term incentive method,equity incentive aims to promote the continuous growth of enterprise value.By granting stock options,company shares or other rights and interests to the incentive object,the incentive object can have a sense of ownership and form a community of interests with shareholders,thus promoting the enterprise to realize the long-term goal of stable development.Since 2005,when the state promulgated the relevant management measures for equity incentive,more and more listed companies have implemented equity incentive plans.However,the proportion of successful implementation of equity incentive plans is very small,because many enterprises only stand in the perspective of management interests and do not consider the company’s long-term development strategy when formulating equity incentive plans,resulting in failure of equity incentive plans or unsatisfactory implementation results.DA Company is a state-owned listed enterprise dominated by biological technology.In order to improve the company’s performance and attract talents,the company launched its first equity incentive plan in 2009.However,due to the conflict between the content of the incentive plan and the relevant regulations for the implementation of equity incentive in state-owned enterprises,the audit failed.Four years later,the company launched a new equity incentive plan,but it finally ended in failure.Based on this,this paper studies the content,implementation effect and failure reasons of its first equity incentive plan.The research thinking is: Firstly,it describes the motivation and implementation process of DA Company’s equity incentive plan,and makes a comparative analysis of the contents of the two equity incentive plans.Secondly,from the financial and non-financial aspects,this paper makes a longitudinal and horizontal comparative analysis of the performance before and after the implementation of equity incentive,so as to further determine the implementation effect of equity incentive.Finally,according to the previous analysis,the paper points out the existing problems in DA Company’s equity incentive plan and puts forward some suggestions.The significance of this study lies in taking DA Company’s failed equity incentive plan as an example,finding the deficiencies in the company’s equity incentive plan,and combining with the specific situation of the enterprise,putting forward suggestions to improve the DA Company’s equity incentive plan,contributing to the next round of equity incentive plan for DA Company,and also hoping to provide reference for other enterprises to implement equity incentive plan.Through the study,the following conclusions are drawn: first,after the implementation of equity incentive,it only has certain promotion effect on the growth of net profit and EVA in the first year,and the second year shows a downward trend,and this negative influence persists after the termination of the incentive plan.in addition,it has not achieved the purpose of encouraging core research and development personnel and improving the innovation ability of the company.Secondly,through case analysis,it is found that the reason for the failure of this incentive plan is not only the performance fails to meet the assessment requirements,but also the equity incentive plan itself has many unreasonable points,such as single incentive mode,insufficient incentive strength,fixed exercise price and unreasonable exercise conditions.