Is Executive Equity Incentive An Effective Incentive Or Welfare?

Equity incentive has experienced a gradual test and slow development process in China.With the gradual introduction of national policies,equity incentive is on the right track.However,with the wide use of equity incentive,the design schemes are good and bad mixed together.Theirs negative effects,which embody in the inequality between incentive and constraint,are also concerned by the mass media and questioned by investors.For the purpose of welfare,the managements of companies manipulate the design and implementation of the equity incentive plans,which lead to the invisible benefit transmission and damage the interests of small and medium shareholders.On the contrary,these equity incentive plans affect the role of incentive,and make equity incentive a tool for executives to seek benefits for themselves.Based on this,this study takes Evenwin Precision as an example.The core research issue of this dissertations: whether there is any behavior that executives seek benefits for themselves in the equity incentive of Evenwin Precision company?Research ideas: Combined with the existing literature research,on the basis of principal-agent theory,efficient contracting theory,and power theory,through case study method,based on the equity incentives mode choice and motivation by Evenwin Precision in 2013,the following specific issues are respectively explored around the core issues.(1)Does the implementation of equity incentive plan achieve the expected effect?(2)Whether the announcement and design of equity incentive plan is reasonable?(3)Is there any defect of governance mechanism in the design and implementation of equity incentive?The research findings are as follows:(1)Since the low exercise conditions,the design of Evenwin Precision equity incentive plan is unreasonable.And there are behaviors of executives seeking benefits for themselves.(2)The resolution of the board of directors,the independent directors and the remuneration and appraisal committee of Evenwin Precision company need to be improved,and there are defects in corporate governance such as major shareholder control.(3)With the gradual establishment of relevant national regulations,companies can set up pluralistic exercise conditions and improve the internal governance structure of the company to avoid equity incentive becoming a tool for executives to transfer their interests.Research Innovation and Practical Enlightenment: First of all,there are few literatures to analyze the investor performance of key time points of equity incentive.Starting from the market reaction of key time points of equity incentive,this dissertation analyzes whether investors agree with the equity incentive plan.Secondly,the academic research on incentive and welfare effect in equity incentive is mostly based on the empirical analysis of equity incentive draft,or large sample empirical research.There are few cases study,from the aspects of implementation effect,rationality of plan design,and corporate governance mechanism,to analyze whether there is any behavior of executives seeking welfare for themselves in equity incentive plan.Finally,most of the research on the incentive and welfare functions of executive equity incentive is focused on large state-owned enterprises,while this paper chooses private enterprises in Growth Enterprise Market to study the incentive effect of executive in equity incentive,which enriches the scope of existing research.At the same time,this paper provides some reference for the design and implementation of the equity incentive plan of the listed companies in the future.