Case Analysis On Iflytek's Incentive Effect Of Equity Incentive For R&D Employees

Under the background of “Mass Entrepreneurship and Innovation”,high-tech enterprises take advanced technology as their core competitiveness,which is the engine of modern economic growth and plays an irreplaceable role in the process of economic and social development.The whole process of R&D activities is dependent on the proprietary information of R&D employee.As an incentive system to motivate managers and employees to better serve enterprises,equity incentive plays a positive role in solving the agency problem caused by the separation of management rights and ownership and the opportunism behavior of senior executives caused by information asymmetry.After the issue of the trial method of equity incentive management for listed companies by CSRC in 2005,the implementation of equity incentive plan for listed companies in China began to have an institutional basis,and national policies began to support and guide the design and implementation of equity incentive.At the same time,the scope of equity incentive objects also began to expand,and researchers were gradually included in the incentive objects.There is an gradual increase on the number of announcements for equity incentive plans issued by a-share listed companies in China,reaching 405 in 2017 and 409 in 2018,which are known as “the historical double peak”.However,what is the impact of the incentive measure for scientific researchers equity incentive on the improvement of the value for the enterprise? And how to achieve the effect? We should pay much attention on these problems.First and foremost,we selected Anhui USTC iFLYTEK CO.,LTD.,a representative high-tech enterprise,who issued the equity incentive plan mainly for R&D employees,using the literature research,event study method,case analysis and quantitative analysis,basing on the principal-agent theory,human capital theory,contract theory and two-factor theory,analysing a mass of pubic date extracted from the CSMAR database,database of wind and the CNINFO,found iFLYTEK's technological employee as the main incentive object after the implementation of equity incentive plan,through innovation performance,business performance,ability to attract talents three concrete path to realize the enterprise value of ascension.Then,this paper makes a specific analysis on the shortcomings of IFLYTEK in equity incentive,deduces the problems that may exist in the implementation of equity incentive plan for the whole high-tech enterprise,and proposes countermeasures for the specific problems.Eventually,the paper arrives at the conclusion: the equity incentive for the core technical employee of high-tech enterprises will promote the improvement of R&D investment,innovation level and innovation quality,enhance the enterprise's operating ability,development ability and talent attraction ability,and improve the enterprise's profitability in the long run,which is conducive to promoting the enterprise value.While high-tech enterprises take efforts to enhance the value of the enterprise,they can consider the measure of key technical employee equity incentive.However,while strengthening the investment in scientific research,the enterprise should also take into account the possible adverse impact on their own profitability,in order to avoiding the damage for the profitability of enterprises and avoiding business risks.In addition,when implementing the equity incentive plan for high-tech enterprises,a series of problems,such as imperfect evaluation system,unreasonable assessment period setting and excessively high exercise standard setting,may take place.In this regard,high-tech enterprises should consider the design of equity incentive plan when implementing equity incentive plan to encourage researchers to work hard,so as to achieve the diversification of evaluation indicators,the rationalization of assessment period and the effectiveness of exercise standard.