A Comparative Study Of Vanke's Two Equity Incentive Schemes

With the continuous development of the capital market in China,equity incentive has increasingly become the preferred method to solve the conflicts of interest between shareholders and managers,which is caused by the principal-agent problem.China Vanke C0.is a leading enterprise in the real estate industry and also one of the earliest listed companies to implement equity incentive plan.Vanke has launched two equity incentive plans in 2006 and 2011 respectively,and the study on the process of its equity incentive has certain enlightenment and reference significance for China's listed companies.This paper uses case analysis,comprehensive analysis and comparative analysis to introduce the related content.It starts from the equity incentive's basic introduction and the current development situation of it in our country.Taking Vanke's two equity incentive plans as a case study,this paper elaborates the reasons for the implementation of Vanke's two equity incentive and also about the contents of the plan and the implementation results.Then it makes a comprehensive analysis of these two equity incentive plans from four aspects: stock source,performance index,incentive period and incentive result.Among them,comparative analysis is used in every aspect.Through the analysis and research,this paper comes to the following conclusions: first,it is unreasonable for Vanke to take the stock price index as one of the assessment indicators in its equity incentive plan in 2006,and its numerical setting of performance indicators is too low.Secondly,the stock source of private placement in Vanke's 2011 equity incentive plan leads to high executive exercise cost.These two problems are personality problems found in the comprehensive analysis.At the same time,there are two common problems in the two equity incentive plans,that is,the incentive period is relatively short and the incentive effect is easily affected by external factors.Among them,the influence of external factors on incentive effect is mainly realized through stock price.Finally,this paper puts forward policy suggestions from the two perspectives: the detailed design of the equity incentive plan and the development environment of the equity incentive plan.Among them,suggestions for the detailed design include five aspects: the reasonable setting of performance assessment indicators,the improvement of non-financial indicators assessment system,the diversification of incentive models and the integration of stock sources,the flexible adjustment of exercise price and grant shares and the appropriate extension of incentive period.Suggestions for the development environment include suggestions for the economic environment,suggestions for the legal environment,suggestions for the political environment and suggestions for the cultural environment.By this way,it hopes to provide some inspiration for Vanke to implement the equity incentive plan again in the future and provide some references for other companies,so as to provide some ideas for the improvement of China's equity incentive policies.