Welfare Employee Stock Ownership Plan

China Securities Regulatory Commission announced Guidance on Employee Stock Ownership Plans(ESOP)for listed companies to encourage the listed companies to implement ESOPs.In order to combine the interests of the employees with the interests of the shareholders,and encourage the employees and the enterprises to share the benefits and disgrace.According to statistics,from January 2014 to August 2017,as of August 17,2017,320 companies implemented ESOP.This paper studies the problem of ESOP.ESOP is welfare and has no incentive effect.The long-term results will lead to the decline of operating performance and the decrease of shareholders' wealth.The research finds that:(1)ESOP is welfare and has no incentive effect.(2)Managers will use employee stock ownership plan to transfer shareholders' rights and interests to employees in order to please employees,thereby reducing management pressure;(3)In the case of imperfect internal governance mechanism,Long-term results will lead to the decline of operating performance and shareholder wealth.This paper takes Schneider Electric's Employee Stock Ownership Plan in France as an example,through the analysis of its implementation motivation,incentive effect and feedback from the market and other aspects,finds that ESOP has no incentive effect and is welfare.In the case of imperfect internal governance mechanism,under the premise of enforcing the Employee Stock Ownership Plan under this e national law,through the operation of Employee Stock Ownership Plan.management will sacrifice shareholders' rights and interests and transfer them to employees in order to appease and reassure them.Short-term results will lead to ease conflicts and reduce the efforts of the management.Through summarizing the situation of the case company,we can draw lessons from the implementation of ESOP in China.The innovations and application significance of this paper lie in: 1)based on the theory of the principal-agent relationship between shareholders and management,Employee stock ownership plan is of welfare nature and will not have incentive effect;2)Perfect corporate governance mechanism can regulate the behavior of management and combine the conflicting "shareholder wealth" maximization theory and "stakeholder wealth maximization theory" to play a role together;3)providing evidence for the implementation of mandatory employee stock ownership plan.Provide empirical evidence.