Research On Repurchased Restricted Stock Incentive Plan

Recently,listed companies have gradually realized that stock option has some inherent disadvantages.While restricted stock incentive has been paid more and more attention by listed companies because of its coexistence of constraint and incentive.Therefore,how to design a reasonable and effective restricted stock incentive plan according to the status quo of listed companies has gradually become the focus of discussion.At this point,in order to improve the sluggish stock market,the state has introduced a series of policies that listed companies can use repurchased stock for equity incentive.Under the guidance of policies,many listed companies have begun to use repurchased stock for equity incentives,which has enriched the use of stock repurchase and improved the design of equity incentive plans.Currently,most companies use repurchased stock to implement restricted stock incentives.Repurchased restricted stock incentive is an innovative equity incentive model.Listed companies use the stock which they repurchased from stock market to implement restricted stock incentives.This model is significantly different from ordinary restricted stock incentive in terms of stock source and incentive elements.It has its own characteristics such as dual dynamic performance assessment mechanism and independent pricing way.This paper takes Supor’s two repurchased restricted stock incentive plans in 2013 and 2017 as examples,analyzes the specific plan design,and verifies the effectiveness of this model from multiple perspectives,so as to provide guidance for listed companies to effectively implement repurchased restricted stock incentive in the context of Chinese market.This paper is divided into seven chapters.The first chapter mainly introduces the research background and significance,research ideas and methods,and also points out the contributions and shortcomings in this research.The second chapter is concept and literature review,this part conducts research from stock repurchase and equity incentive,and finds that they can improve the performance of company.The third chapter is theoretical basis,this part analyzes principal-agent theory,human capital theory,two factor theory and equity incentive contract theory.In addition,it also introduces the motivation and scheme design of repurchased restricted stock incentive.Exploring its motivation and complete framework from the perspective of universality.The fourth chapter introduces the institutional background and current situation of repurchased restricted stock incentive,focusing on its current development.The fifth chapter introduces the scheme design of Supor’s repurchased restricted stock incentive plan,analyzing its specific motivation,expounding its scheme design and finally summarizing characteristics of Supor’s incentive plan.The sixth chapter is to test the effectiveness of Supor’s repurchased restricted stock incentive.This part verifies its effectiveness from five different dimensions.Event research method is used to evaluate the stock market response.Index analysis method is used to vertically compare Supor’s financial indicators from 2010 to 2018,and horizontally compare with 15 other companies in the same industry.And this part also verifies Supor’s incentive plan can reduce company’s agency cost,optimize company’s capital structure,and then comprehensively improve the enterprise value.The seventh chapter summarizes the conclusion of this paper.Compared with the ordinary restricted stock incentive plan,repurchased restricted stock incentive plan is better both in theory and practice.Therefore,in the future,listed companies should pay more attention to the innovation of incentive plan,the design of incentive elements and the implementation of multi period rolling plan.