Research On The Implementation Effect Of Suning Stock Option Incentive Plan

With the development of the economy.Modern companies often regard equity incentive as a long-term incentive mechanism within the company.Facts have proved that equity incentive plays an irreplaceable role in many aspects,such as improving company performance and stabilizing core talents.With the gradual improvement of the structure and mode of capital market in China,many listed companies choose equity incentive to stimulate executives to plan for the company more faithfully and core technical personnel to gain more benefits for the company.Besides making significant contributions to the company and innovative talents urgently needed by the company,they also make greater efforts for the company.By adopting this long-term effective incentive mechanism,they expect to be able to effectively reduce the cost of human capital and rationally improve the internal governance structure of the company while helping to improve corporate performance.But at the same time,some listed companies in our country have encountered setbacks in the process of carrying out equity incentive programs following the successful model.Some of them have not fully investigated and clearly understood the internal and external environment of the enterprises in the early stage,have not grasped the real situation of the enterprises,or have not reasonably estimated the short-term and long-term risks that the enterprises may face in the future.Therefore,the equity incentive scheme adopted by enterprises is not compatible with it and is not suitable for its development,and such a scheme will lead to the implementation of equity incentive effect is not expected or even directly lead to the failure of equity incentive.This paper takes Suning,the leading retailer of household appliances,as the research object,to analyze the implementation effect of its equity incentive scheme in2010.First of all,we will briefly introduce the operation mode and operation situation of Suning Electric Appliance.We will analyze the stock price effect of Suning Electric Appliance in 30 days before and after the equity incentive announcement by event analysis method,and draw a conclusion that within 30 days after the announcement of Suning Electric Appliance's equity incentive announcement,its excess return is positive.We will test the analysis results through empirical analysis.Secondly,we analyze the financial situation of Suning's profitability,solvency,operation ability and growth ability through various financial indicators.Then,we analyze the specific motivation of the three equity incentives implemented by Suning in the light of itsgradual strategic transformation in the process of development,with emphasis on the equity incentive scheme in 2010.Combining with the motivation of equity incentive,the effect of equity incentive implementation is analyzed.By comparing the stock price before and after the implementation of equity incentive and excluding the interference factors,the short-term and long-term effects of the implementation of equity incentive on the market are analyzed.Finally,through the empirical analysis method of factual analysis,we use data such as ROE and shareholder equity ratio to obtain the excess return rate and other data.Finally,through the analysis,the paper draws a conclusion,evaluates the advantages and disadvantages of equity incentive in Suning,and combines with the implementation of equity incentive in Suning,gives suggestions and opinions on equity incentive plans of other companies.