Study On The Improvement Of KH Company Equity Incentive Plan

Equity incentive can operate in long period,and solve the conflict of interests between shareholders and managers by linking agent's remuneration and enterprise performance closely.It plays an irreplaceable role in incentive mechanisms,and helps the promotion of corporation governance structure,standardize operation and sustainable development.Compared with foreign countries,China's equity incentive started later.With the promulgation of relevant policies,more and more listed companies implement equity incentive plans in practice,but not all the plans reach expectations.According to institutional economics,the essence of contract has a significant impact on the outcome of economic transactions.An equity incentive plan also belongs to a kind of contract.Whether equity incentive can be effectively exerted,depends on the reasonable and effective of contract elements of the incentive plan.Therefore,this thesis mainly starting from the essence of equity incentive contract,and discusses the selection,combination and result in detail,thus exploring the patterns and impacts of single or combined equity incentive contract element on enterprise performance.The case company selected in this thesis is KH Company,a high-tech enterprise in power supply industry in China.KH Company implements the equity incentive plan as one of the important supported strategies,and carries out more than one equity incentive plan continuously.The first equity incentive plan is about restricted stock,and the second is the combination of-restricted stock and stock option,which are the two main modes in listed companies.Based on the concept of contract structure,different contract elements of the two equity incentive plans could lead to different implementation results.This thesis compares the differences of contract elements and the implementation results between KH company two equity incentive plans,and analyses the contract factors that affect the results,which could provide a reference for scientific and technological listed companies to design a reasonable equity incentive plan.