Research On The Implementation Effect Of Equity Incentive In T Company

Due to the separation of owners and operating rights,there will be conflicts of interests between shareholders and managers.Shareholders hope to earn higher rewards,while managers need incentive and constraint mechanisms to restrict the behaviors of management to achieve their goals.Equity incentive is the best solution.At present,in China,there are few company templates in specific industries,and scholars’ research samples are also scarce.Moreover,not all equity incentives implemented by companies can achieve positive results in the end.This paper selects T Company’s three-phase equity incentive plan as the research object.First of all,from the research background and purpose,domestic and foreign status quo and research content and methods,then the concept of equity incentive and related theories are sorted out;Secondly,the case study method is adopted to introduce T Company,mainly from the basic situation,industrial structure,controlling shareholders and the motivation of equity incentive.Then,a detailed introduction of the three equity incentive plan and the implementation of the general situation and comparative analysis,summed up the design of the different elements of the plan;Thirdly,the event study method is used to evaluate the capital market reaction after the implementation of equity incentive with AR and CAR.The first and second phases bring positive effects,while the third phase has negative effects because it is being implemented.The financial index is used to analyze the business performance during the period of equity incentive.Use EVA to evaluate the overall creative ability as well as the effect of non-financial indicators on evaluation,such as the four angles of T company effect evaluation,seemingly expected effect to enterprise from financial Angle,but from a different Angle analysis of the third period,on the basis of the analysis found that the latest issue of equity incentive no significant effect,effect is not ideal.Therefore,in view of the problems existing in the implementation process,this paper puts forward some suggestions for improvement,including scientific design of performance assessment system,extension of incentive period and reasonable number of equity grants.It also puts forward that we should improve the corporate governance structure,strengthen the supervision of the process of the design and implementation of the equity incentive scheme,improve the means of the external environment for the effective implementation of the equity incentive and strengthen the internal and external supervision environment to ensure that the improvement of the implementation of the equity incentive can be fully and effectively implemented.Finally,summarize and look into the future.Through the improvement of T company’s equity incentive implementation,but also to the same industry has not implemented or the implementation effect is not good to give suggestions and inspiration,provide a certain reference value.