Research On Motivation Of Equity Incentive And Company Performance

With the advent of the era of economic knowledge,modern companies have gradually presented a state of separation between ownership and management rights of companies,and the interests between them are inconsistent.The emergence of equity incentive system is an effective way to improve the principal-agent problem between companies.It binds the employees who have the right to operate the company with the interests of the company,so that the interests of the two can be unified.Through the incentive of the employees,it makes them work hard actively,so as to improve the long-term performance of the company.Equity incentive system has been widely operated in some powerful countries,and various theories and practices are also tending to improve.In recent years,the system has been gradually recognized by the Chinese government,gradually introduced and implemented.Since 2006,China's Securities Regulatory Commission has promulgated a number of legal systems successively,providing guidance and policy basis for the improvement of the split share structure of listed enterprises,and equity incentives have gradually become popular in China.This paper takes the N company listed on the GEM as the research subject,combines relevant theories,emphatically analyses the motivation of the three equity incentive plans of the N company,compares the completion of the three schemes and business performance,and draws conclusions and enlightenments.Firstly,this paper introduces the background of equity incentive,research summary and relevant theoretical knowledge of equity incentive motivation,which makes full preparations for the following case analysis;secondly,it gives a brief introduction of N Company,and compares the similarities and differences of the three equity incentive plans of N Company.Corresponding to different motivations,it is found that the first two incentive plans are incentive motivation and the third plan is welfare motivation,and then introduces the completion of the three schemes:the first two failed,the third succeeded;then,through the event study method,index analysis method,Dupont analysis method,this paper compares the performance of the three incentives between horizontal industries and the vertical company itself,and finds that although the first two schemes failed,they actually played a role in the company.Despite the success of the third scheme,the incentive effect is not obvious,which leads to the conclusion that:(1)The conditions for setting up equity incentive should be moderate and reasonable;(2)The quality of equity incentive scheme can not be evaluated only on the basis of the success of implementation,but also on the basis of the horizontal comparison of the situation of the whole industry and different equity incentive;(3)The timing of launching equity incentive scheme should be chosen correctly.Finally,the inspiration from the three incentive schemes is drawn and suggestions are put forward.The innovation of this paper lies in the fact that in the past few studies have combined the motivation of equity incentive with the final performance of the business,and the evaluation of the scheme is generally only based on the success of the incentive results.Starting from a new direction,this paper analyses the motivation of equity incentive and the business performance it brings.It is found that although the result of incentive motivation fails,it still plays an incentive role.We can not only evaluate the scheme of equity incentive based on whether it is successful or not,but also whether it set reasonable and appropriate incentive conditions to achieve the optimal win-win situation.