Research On The Design Of Equity Incentive System From The Perspective Of Property Rights

With the expansion of enterprise scale and the intensification of market competition environment,enterprises must have rich professional management knowledge to make correct business decisions if they want to achieve long-term and good development trend.However,the owners of enterprises may not have such superb management ability,so they will entrust professional managers to manage on their behalf,thus resulting in the separation of ownership and management.However,the interest trend of managers and owners is not consistent,and the separation of the two rights will bring some negative effects,namely,the principal-agent cost,while improving the operating efficiency of enterprises.Although many scholars are still skeptical about the correlation between equity incentive and enterprise value enhancement,the mainstream views at home and abroad have long recognized that equity incentive is one of the effective measures to reduce the principal-agent cost.As a long-term incentive method,equity incentive tends to unify the interests of handlers and owners,and makes them share the surplus value of enterprises together,so as to promote handlers to work better and conscientiously for the long-term development of enterprises,achieving the goal of maximizing the value of enterprises.Since the reform and opening up,with the rapid development of China's economy,equity incentive mechanism has also been widely used,and has played an important role in the development of enterprises.However,there are two distinct property rights of listed companies in our country,which lead to different considerations of enterprises with different property rights when implementing equity incentives,and then there are differences in system design.In this paper,by reviewing our country from 2006 to 2018 between the thirteen years promulgated relevant laws and regulations of equity incentive system,found the state-owned assets supervision and administration commission,the ministry of finance and other relevant government departments for state-owned Shanghai jahwa enterprises shall be separately formulated a set of rules,the state-owned enterprises in the design of equity incentive system will be constrained by listed companies is more strict than normal policy.Then,this paper analyzes the data of the equity incentive plans approved by Chinese listed companies every year from 2006 to 2018.The results show that there are certain differences between state-owned enterprises and private enterprises in the number,level,validity period and methods of incentive.hrough the review of the above laws and regulations and the analysis of the current situation of incentive,there is sufficient evidence to show that the nature of property rights will affect the design of enterprise equity incentive system.As for the reasons for the differences,this paper extracts three reasons,namely policy restriction,corporate governance and implementation motivation.Through research and analysis,state-owned assets supervision and administration commission,securities regulatory commission and other relevant government agencies for consideration to the safety of state-owned assets,equity incentive executives of state-owned enterprises incentive levels,formalities for examination and approval of the period of validity,such as more strict policy regulation,but the corporate governance of state-owned enterprises characteristics easy to cause the situation of owner absence,insider control,its equity incentive will usually hold concurrently in the design of incentive and welfare motivation.In contrast,because private enterprises have fewer restrictions in the design of equity incentive mechanism,the design of equity incentive mechanism will be more inclined to incentive purposes,more in line with the actual development needs of the company,and the implementation effect will naturally achieve the purpose of promoting enterprise performance.This paper takes two equity incentive mechanisms of JAHWA under the nature of state-owned property rights and private property rights respectively as case studies,and explores the differences of mechanism design and implementation effect and the reasons for the differences when Chinese state-owned enterprises and private enterprises implement equity incentive plans.The applicability of the above theoretical analysis is verified in specific cases.Therefore,the conclusion of this study shows that the difference of nature of property rights will have a great impact on the design of equity incentive mechanism,and then affect the effectiveness of equity incentive.There are three reasons,policy restrictions,corporate governance characteristics and implementation motivation.In order to make the equity incentive mechanism play its role better,there are some effective measures,such as speeding up the process of restructuring state-owned enterprises,improving the structure of corporate governance,establishing a sound and competitive market for professional handlers and improving the relevant laws and regulations of equity incentive.