On The Equity Incentive Effect Of Fiber Home

Since the separation of ownership and management rights has led to the emergence of agency problems in corporate governance,equity incentives have emerged as an important mechanism to solve agency problems.However,in the implementation process of the equity incentive plan,it is not always easy.In the case of Yili shares and Hainan Haiyao,the implementation of equity incentives has brought huge losses to the enterprises.Therefore,what are the key points in the design of the equity incentive plan,whether the company can achieve the expected incentive effect in the process of equity incentive implementation,and how to design a suitable equity incentive plan based on the actual situation of the enterprise.These issues are worthy of further study.Among the enterprises that implement equity incentives,they mainly focus on computer,communication and other electronic equipment manufacturing.As the leader among them,Fiber Home has implemented three equity incentive plans in nine years.As the first state-owned enterprise to be approved after the release of the “State-owned Listed Companies(Domestic)Implementation of the Equity Incentive Trial Measures”,the equity incentive plan of Fiber Home has certain reference significance.This paper will provide relevant suggestions and guidance through the analysis and research of the equity incentive plan of Fiber Home,in order to better play the role of equity incentive mechanism and promote the development of China's equity incentive system.This paper takes case analysis as the research method.Firstly,it defines the concept of equity incentive,and analyzes the basic elements of the equity incentive contract and the theory related,such as the incentive theory.On this basis,this paper introduces the implementation process and the content of the scheme of the three equity incentive plan of Fiber Home,and analyzes the motivations and design of the equity incentives in Fiber Home from the perspective of the basic elements of the above-mentioned equity incentive contract.Next,this paper analyzes the effects of Fiber Home's plan from the short-term market reaction,long-term financial performance and non-financial indicators.By comparing the changes of Fiber Home and the mean value of the industry horizontally,we can more accurately evaluate the equity incentive effect of Fiber Home,and observe the impact of the different incentive modes by comparing the effects of the previous two equity incentive plan.Through the study of the case,this paper summarizes the problems existing in the equity incentives of Fiber Home and puts forward relevant suggestions on this basis.From the macro level,the paper puts forward the policy recommendations for optimizing the external environment,and summarizes the suggestions for improving the internal environment of equity incentive implementation from the micro level.First of all,from a macro perspective,it is necessary to gradually establish sound equity incentive laws and regulations and a standardized manager market to create a favorable external environment for listed companies to implement equity incentives.Secondly,from the design of the equity incentive scheme itself,in the choice of incentive model,the appropriate equity incentive model should be selected according to the actual situation of the enterprise;in the determination of the incentive scope,it should be set properly,too small may not be motivated,and too large to make it a welfare-type equity incentive,thus violating the original intention of the equity incentive mechanism;in the establishment of the evaluation index system,it can increase market-oriented indicators and non-financial indicators to comprehensively and objectively examine the performance of the object;in the setting of the evaluation index value,the appropriate level should be determined,so that the equity incentive plan truly becomes the driving force for the management's efforts.The possible innovations of this paper are as follows: First,in the past,when scholars studied the effect of equity incentives,the main research was the impact of equity incentives on firm performance.On the basis of previous studies,this paper no longer only studies from this aspect,but from the four dimensions of equity incentives and corporate performance,company innovation,talent retention and agency costs,comprehensively examine the effect of equity incentive implementation,and broaden the research perspective of equity incentive effect.Secondly,this paper makes a comparative study on different modes of equity incentive schemes,trying to compare the differences in the implementation effects of different equity incentive models,and provide guidance for other companies to choose the appropriate equity incentive model.