Financial Performance Study Of Employee Stock Ownership Plan

With the development of market economy and the change of labor market,more and more listed companies begin to pay attention to employee stock ownership mechanism in recent years,and employee stock ownership has entered a "golden period" of vigorous development in China.However,by reviewing the relevant literature,we find that researchers have great differences on whether ESOP has a beneficial impact on corporate performance.Therefore,this paper explores the implementation of ESOP has different financial performance for enterprises,and provides experience for other listed companies to implement ESOP,which has a certain practical significance.This paper adopts comparative analysis,event analysis and case analysis to explore the financial performance of ESOP.Firstly,this paper combs the conduction relationship between employee stock ownership plan and enterprise financial performance from three aspects:incentive effect,governance effect and wealth effect.Then it introduces the process and motivation of Wanda information and Wu Tong holding ESOP.Secondly,the financial performance of Wanda Information and Wutong Holdings before and after the implementation of the employee stock ownership plan were compared and analyzed to explore the reasons for its different financial performance.According to the above research,the following conclusions are drawn:(1)the incentive and governance effects of ESOP enhance the profitability of enterprises;(2)the wealth effect of ESOP brings positive market reaction to enterprises;(3)the effect of ESOP on Wanda Information and Wutong Holding's financial performance.The impact is not the same;(4)Blind implementation of ESOP may affect the effectiveness of ESOP;(5)Employees participation in corporate governance is not high,and the long-term incentive effect of ESOP is not good;(6)High leveraged shareholding has brought greater risks to enterprises.This paper puts forward some suggestions on ESOP:(1)Enterprises should be well prepared to avoid short-term behavior;(2)Avoiding the risk of high-leverage ESOP;(3)ESOP should be appropriately extended;(4)Extending the lock-in cycle or guiding employees to pay attention to the operation of the enterprise;(5)Combining ESOP with employee participation;(6)Combining ESOP with employee participation.Employee stock ownership and performance appraisal...