HD Company Equity Incentive Case Study

The ownership and management rights of the enterprise are separated.The owner acts as the principal to deliver the daily management right of the enterprise to the agent to form a principal-agent relationship.However,due to the asymmetry of information,the principal-agent problem arises.Equity incentives can effectively alleviate agency problems and are widely used at home or abroad.Equity incentives are companies that give employees a certain amount of equity in a specific way at a given time,thereby motivating employees to contribute to the company's long-term development.On the one hand,the creation of the equity incentive mechanism makes the management become the shareholder of the company,guarantees the consistency of the individual and the company's rights and interests,and avoids the risks brought about by the contradiction of the principal-agent.To the extent,the implementation of the equity incentive plan can retain the internal Excellent employees,attracting external high-quality talents,and providing strong human resources protection for the development of the company.Regarding the research on equity incentives,no matter whether it has made continuous progress in theory or practice,there are more and more enterprises that use equity incentives as a strategic measure to solve governance problems.This paper takes the case company that implements equity incentive as the research object,describes the implementation process and content of the plan in detail,and analyzes the implementation effect.It is expected that other listed companies in China can learn the success of the case company and avoid the shortcomings in the plan.This paper mainly uses case analysis and comparative analysis to conduct research.Firstly,the author summarizes and analyzes the opinions of scholars at home and abroad by querying a large number of documents,and believes that it is of great significance to study equity incentives.Then on the basis of the concept and theoretical understanding of equity incentives,HD company is used as a case company to elaborate the whole process of the company's 2011-2017 incentive plan implementation,combined with the system background,industry background,The details of the company's background and program have been carefully studied.Through a focus on analyzing financial effects,vertical and horizontal comparative analysis of financial indicators such as solvency,profitability,operational capability,and growth capability indicates that equity incentive implementation has a positive correlation with corporate performance growth.At the same time,combined with non-financial effects,the quality and innovation ability of employees and sales ability have improved with the implementation of equity incentives.The stock price has also had a good market response after the launch of the equity incentive plan.Finally,this paper evaluates the experience of the successful implementation of equity incentives and the shortcomings in the implementation process of the selected companies,and summarizes the case enlightenment of the company's implementation of equity incentives.When setting up the equity incentive plan,it should reasonably select the incentive targets and establish science.Complete evaluation system,set appropriate exercise conditions,improve internal governance structure,and improve capital market order.