Case Study On Four Periods Of Equity Incentive Of Lnovance Technology

As a kind of long-term incentive mechanism for enterprises,a reasonable equity incentive scheme can enhance the enthusiasm of incentive objects,retain core employees for enterprises,and attract high-end talents;and it also can increase the scientific and technological content of products,reduce the agency cost of enterprises,promote the long-term and healthy development of enterprises,and maximize the interests of stakeholdersShenzhen Inovance Technology Co.,Ltd.is founded by 19 technicians who once worked for HUAWEI Technologies Co.,Ltd.;and it was listed on the growth enterprise market(GEM)of A-share in September 2010,with an issue price of 71.88 yuan.After going public,it runs equity incentive through its development concept and implements as a long-term system.Four phases of equity incentive were implemented in November 2012,April 2015,October 2016 and January 2019 respectively,during which its net profit increased from 204.4196 million yuan in 2012 to 1.2087208 billion yuan in 2018.The development trend of it is getting better and better,which is directly related to the fact that it attaches importance to the management and salary system as well as the core talents retainment.What is the specific content of its four phases equity incentive?What is the experience and enlightenment for listed companies of GEM in China?This is worth studying.By employing the method of case study,this thesis introduces the concept of equity incentive,the basic elements of equity incentive plan and principal-agent theory in the theoretical explanation part.And in the case analysis part,firstly,it introduces the basic information of Shenzhen Inovance Technology Co.,Ltd.and the specific content of its four times equity incentive plan.Secondly,it conducts a comparative analysis of its four times equity incentive plan from four aspects,including the incentive method,incentive quantity,incentive object as well as the exercise condition;finally,it analyzes the implementation effect of its equity incentive from multiple perspectives,especially for the short-term market response,the reaction of such financial indicators as financial performance and the reaction of other non-financial indicators.It turns out that its equity incentive has a positive role in promoting the company's short-term market response,and the market has a good response to its equity incentive,reflecting the confidence of investors;under the financial perspective,its equity incentive has a good effect,and promotes the long-term and stable development of the company;under the non-financial perspective,its equity incentive plays a role in retaining and attracting talents.Finally,this thesis summarizes the successful experience and shortcomings of its equity incentive;and in terms of the design of equity incentive plan,this thesis gives the listed companies six references and inspirations,including choosing the equity incentive mode that is in line with the company's development status and the industry's development background,focusing on the equity incentive for core technical personnel and business backbones,appropriately extending the incentive period,setting reserved shares,enriching the assessment indicators of equity incentive as well as formulating reasonable performance assessment requirementsThe study of this thesis can be used as a reference for the listed companies which intend to implement equity incentive.It is conducive for such companies to understand equity incentive's significance of promoting the sound and stable development of enterprises in the long term,and it is helpful for such companies to formulate equity incentive plans according to their own conditions,improving the enthusiasm of employees and promoting the sustainable development of enterprises.