Research On The Implementation Effect Of Hikvision's "Business Follow-up Investment + Restricted Stock" Equity Incentive

Equity incentive is proposed in the context of the separation of ownership and management rights.It is an effective way to increase management's enthusiasm,increase management's opportunity cost of violations,reduce agency costs and supervision costs,and attract and retain outstanding talent.It is a long-term and effective incentive method.Equity incentives are of great significance to the promotion of company interests and the protection of shareholders' rights and interests,and have been widely used at home and abroad.However,domestic and foreign scholars' analysis of companies that have implemented equity incentives finds that due to the irrational choice of equity incentive programs and inadequate control of the implementation process,many companies did not achieve the expected goals after implementing equity incentives,instead they became management arbitrage.Tool of.Therefore,by studying the successful cases and drawing on their successful experience,it is of great significance to the pre-implementation of equity incentive companies.Hikvision selected the core employee co-investment system for innovative businesses and the restricted stock option for traditional businesses to achieve the company's expected incentive goals and played a good incentive effect.This paper uses it as a case study to summarize the motivation,implementation process and evaluation of the financial performance and non-financial performance of the company after the implementation of equity incentives,and find out and summarize the reasons for the success of the company's equity incentives.It is hoped that the implementation of equity incentives for other similar enterprises will be beneficial.This article first defines the concepts of equity incentives,business follow-ups,stock options,stock appreciation rights,and restricted stocks,and uses incentive theory,principal-agent theory,and human capital theory as the starting points.Next,analyze the implementation of Hikvision's "business and investment + restricted stock" equity incentives to find out the reasons for their implementation,that is,to expand innovative businesses,form tighter performance bundles,and attract and stabilize core talents.The business follow-up investment in 2015 and the implementation of the 2016 restricted stock equity incentive plan.After that,evaluate the implementation effect of Hikvision's "business follow-up investment + restricted stock" equity incentive,select data from 2012 to 2018,and compare its financial performance in debt repayment,operation,profitability,growth,and value creation.For performance,use DuPont analysis method to compare horizontally with Dahua Co.,Ltd.,a representative company in the same industry,and the industry average.At the same time,analyze the company's non-financial performance from three aspects: R & D innovation ability,incentive rate of turnover,and overall quality of employees.It is found through research that Hikvision's financial performance after the implementation of equity incentives is good,and its operation,profitability,growth,and value creation capabilities have been improved.The company is superior to Dahua in terms of profit creation and risk management and far exceeds the industry.Mean.In terms of non-financial performance,the company's R & D and innovation capabilities have been strengthened,the turnover rate of those being motivated has fallen,and the overall quality of employees has improved.It can be seen that the implementation motivation of Hikvision's equity incentive has been realized,and the overall effect is good.By summarizing the performance of the case companies in equity incentives,they have drawn inspiration: innovating equity incentive models;choosing appropriate timing for implementation;and gradually increasing the scope and intensity of incentives.