Study On The Implementation Effect Of Restrictive Stock Incentives In CSCEC

The problem of "principal-agent" caused by the separation of management right and ownership has always been a difficult problem in corporate governance in China,and equity incentive has always been a better tool to solve this problem.Since2005,China began to carry out the reform of non-tradable shares.In 2006,the administrative measures for equity incentive of listed companies(for Trial Implementation)was issued for the first time.The introduction of the measures also means that China’s equity incentive has been supported by policies and started to have a set of laws and regulations of its own.In 2016,the administrative measures for equity incentive of listed companies was formally implemented and revised in 2018,which shows that China’s equity incentive policies tend to be more standardized through constant modification.At present,more than 30% of listed companies in China have implemented equity incentive,and generally adopt the incentive mode of restricted stock,which is also because the restriction of the restricted stock incentive plan is more conducive to eliminate the short-sighted behavior of the management,and thus promoting the enterprise value.The construction industry has always been one of the pillar industries of China’s national economy.This paper takes China Construction Corporation(hereinafter referred to as CSCEC)as the research object.Firstly,it expounds the research significance and research purpose of this paper,through reading a large number of relevant literature on equity incentive and summarizing and commenting on it.Secondly,it introduces the concept,principle and characteristics of restricted stock incentive.Thirdly,this paper introduces and compares the three-phase restricted stock incentive plan of CSCEC,analyzes the changes of financial performance duringthe implementation of the plan,and studies the short-term market response brought by the announcement of the three-phase restricted stock incentive plan by using the event study method,and combines with the non-financial indicators such as enterprise innovation ability and management behavior to comprehensively evaluate the implementation effect of CSCEC’s restricted stock incentive plan.Finally,through the analysis of the implementation effect of the three-phase restricted stock incentive of CSCEC,the paper finds out the problems in the implementation process,and puts forward relevant suggestions from the two aspects of scheme design and external environment.At the same time,it also points out the shortcomings and the future prospects,hoping to provide reference for other enterprises to implement the restricted stock incentive plan.The conclusion of this paper are as follows: The design of China Construction restricted stock incentive plan is more reasonable as a whole,but the unlocking conditions are loose and the unlocking indexes are not comprehensive;Through the analysis of the company’s financial indexes,it can be concluded that the restricted stock incentive to some extent promotes the company’s profitability,stabilizes the company’s debt paying ability and development ability,but does not effectively improve the company’s operating capacity and economic value-added shows a fluctuating upward trend;In terms of shareholder’s wealth,the three-phase restricted stock incentive plans have brought positive short-term market reaction and driven the rise of long-term stock price;In terms of non-financial performance,it has promoted the company to increase its R & D investment,attracted and retained the company’s core talents,continuously increased the amount of newly signed contracts,increased the overall investment of assets by the management,and effectively improved the financing short-term behavior.