Design And Effect Analysis Of Equity Incentive Scheme For Listed Companies

In the early 1990 s,China introduced the equity incentive system,but it was not until December 2005 that this system was formally established in China.Since 2006,the listed companies of China have been increasing the frequency of equity incentives.Equity incentives have become a popular incentive in the market.In recent years,due to various adverse factors,many companies have been forced to declare that their equity incentives have failed.We must admit that there are still many serious problems that need to be solved in the practice of the equity incentives of China,which directly affect the performance of the companies ’ performanceIn 2011,Joyoung Co.,Ltd.shares proposed the first equity incentive plan,but because of its mistakes,the cancellation of the proposal was put forward six months later.Three years later,Joyoung announced the second equity incentive plan based on the lessons learned from the previous failure,and it succeed this time.In 2018,Joyoung took advantage of the previous practice,launched the third equity incentive plan timely and made a lot of improvements.It has also been successfully implemented and is currently continuing to exert its effects.The experience and lessons of Joyoung have provided valuable case references for designing the equity incentive plans for listed companies in China.The first chapter of this article is an introduction,which mainly discusses the related research basis of this article.The second chapter introduces the theoretical basis of stock incentives and the latest research trends at home and abroad,and provides theoretical support and research ideas for this paper.The third is an introduction to the status quo of equity incentives in Chinese listed companies.The fourth chapter is a case study of Joyoung’s three implementations of equity incentives.It introduces the company profile of Joyoung,the event process of the three equity incentives,the respective plans of these incentives and the effect on Joyoung,then summarizes the reasons for the success or failure of the three equity incentives of Joyoung,to provide an optimized design for the equity incentives of Joyoung.The last chapter is the research and analysis of Joyoung’s equity incentive case.Based on the optimization design of the scheme,the general conclusions are drawn.Combined with the conclusions,it provides useful suggestions for other companies to implement equity incentives successfully.The specific enlightenment can be summarized as the following points.First,we must start with the two key points of continuously improving the governance structure of listed companies and continuously strengthening the supervision of equity incentives to ensure the rationality of equity incentives.Second,setting the elements of the incentive plan as scientifically and reasonably as possible.We must formulate a reasonable price with a strong incentive effect.For the incentive object,we must have a small scope and strong incentives.We should pay attention to certain difficulties and Strong incentives coexist,and choose a company’s own equity incentive model.Third,expanding the design of performance evaluation indicatorsand introducing new types of indicators such as EVA,select non-financial indicators to assist,and select diversified evaluation indicators,and design multiple indicator combinations based on this.Finally,we must choose the right time to launch the scheme.