The Impact Of Equity Incentives In Small And Medium-sized Listed Companies On Corporate Financial Performance

Equity incentives are seen as a long-term incentive to solve the problem of entrusted agents and owners and establish a sound supervision and incentive mechanism.Since the split share structure reform in 2006,more and more listed companies in China have implemented equity incentives.According to the statistics of CSMAR database,as of the end of 2017,a total of 1,155 companies have launched equity incentive plans.Among them,323 companies in China's small and medium-sized board market have launched equity incentive plans,accounting for 27.97% of the total,indicating that small and medium-sized listed companies are Equity incentives are also very popular.At the same time,this paper selects small and medium-sized listed companies as the research object mainly based on the following aspects:(1)SME board listed companies are often in the development stage of enterprises,and the development of enterprises is inseparable from the support of talents,so the research on equity incentives It is especially necessary for the retention rate of enterprise talents.(2)In recent years,with the issuance of new shares,the number of listed companies of SME board has increased significantly,and the total market value has been expanding,which has become an important part of China's stock market.The shareholding structure of listed companies is relatively simple,individual investors hold the majority,and institutional investors and state capital stocks account for a relatively small proportion.Therefore,there are some differences in the setting of the equity incentive plan relative to the main board market,and the result may be counterproductive if the equity incentive implementation method of the main board market is copied.Before the specific case analysis,the author collected domestic and foreign scholars' opinions on the relevant aspects of equity incentives,and found that it can be summarized as follows: First,the research on the performance of equity incentives in the early stage,and the second is the equity incentives.With the continuous improvement of the system,relevant scholars began to focus on the relevant elements of the equity incentive plan.Of course,in addition to these two main aspects,relevant scholars have also done some research on other aspects,such as: equity incentives and enterprise innovation,corporate governance and investment behavior,etc.These are the research of this paper combined with small and medium-sized listed companies.the key of.Domestic and foreign scholars believe through empirical and case studies that the incentive structure and contract elements of listed companies that have implemented equity incentives usually have similar forms,but they have not all achieved the desired results.Therefore,what are the key factors in the design of equity incentive schemes,and how the impact of their implementation on corporate performance will be the focus of this paper.Secondly,the related theories of equity incentives are expounded.The related theories are mainly divided into: principal-agent theory,human capital theory and achievement needs theory,and combined with the characteristics of China's small and medium-sized board market industry.This paper mainly uses the case analysis method.Firstly,it makes a simple exposition of the overall development of China's small and medium-sized listed companies and the specific implementation of equity incentives.It is found that with the continuous development of small and medium-sized listed companies,the number of enterprises that implement equity incentives is also Year by year,as of 2017,365 companies have announced equity incentive plans,accounting for 40.42% of the total number of small and medium-sized enterprises.At the same time,after statistics,among the enterprises that implement equity incentives,the manufacturing industry accounts for 74.86%,which accounts for far more than other enterprises,and the scale of enterprises is relatively small compared with the main board market,mainly concentrated between 1-100 million..Secondly,according to the characteristics of the small and medium-sized listed companies,it is found that the small and medium-sized listed companies are mostly family-owned private enterprises,and the controlling shareholders control the development prospects of the enterprises,which makes the concentration of equity of China's small and medium-sized listed companies generally higher.According to the statistics of Wind database,the total shareholding ratio of the top ten shareholders is mainly concentrated in the range of 40%-80%,and the proportion of this interval is about 83.02%.Finally,through the analysis of the equity incentive model of equity incentives in the small and medium-sized board market,it is found that the small and medium-sized board enterprises are more inclined to adopt the restricted stock incentive plan.In the 515 equity incentive plans implemented,the restricted stocks have been implemented 298 times.The characteristics of restrictive stocks are very suitable for the formulation of equity incentive schemes for SMEs,but the deficiencies are also found in statistics,such as the singleness of the exercise indicators and the short period of validity of the scheme.In view of the above points,Hualan Bio is a model enterprise that successfully implements equity incentives and has the characteristics of the above-mentioned small and medium-sized board equity incentive industry.Therefore,it has certain promotion significance for its research.The case selected in this paper is Hualan Bioengineering Co.,Ltd.,which is a high-tech pharmaceutical manufacturing enterprise listed on the small and mediumsized board.As a representative enterprise in pharmaceutical companies,Hualan Biotech implemented equity incentives in 2013.After achieving a good market response,the company plans to implement the second equity incentive plan in 2018.Since the second equity incentive draft has just been promulgated,its incentive effectiveness has to be verified by time.Therefore,this paper mainly combines the design and financial performance of the first equity incentive plan to analyze the merits and deficiencies of the equity incentive plan.On this basis,a summary is made.