The Research On Equity Incentive Performance Of Listed Automobile Enterprises

With the increasing dispersion of corporate equity and the increasing complexity of management technology,modern enterprises begin to explore more efficient and scientific management methods and innovate incentive methods,thus producing equity incentive mechanism in the form of incentive stock options and so on.Equity incentive is to motivate employees to achieve the long-term and short-term goals of the enterprise,and ultimately achieve the strategic goals of the enterprise.Through literature,employees can be found on the firms’ equity holdings and enterprise’s performance level appear certain positive correlation,in order to promote business growth,improve the company’s internal management level,let employees have the identity of the shareholders,the implementation of equity incentive to work hard and improve enterprise value,in order to obtain a higher return on equity.This paper takes Great Wall Motor as the case study object,and the third equity incentive plan were issued by the company in 2019-2020.On the whole,China’s auto industry is undergoing tremendous changes--the country has set the goal of "carbon peak and carbon neutral",and China’s listed auto companies have stepped into the road of technology company transformation.In order to improve enterprise performance and competitiveness,many automobile enterprises choose to implement equity incentive plans.Great Wall Motor has adopted the largest equity incentive plan in history and is a strong representative among China’s listed car companies.Through the collation and summing up of domestic and foreign literature,this paper lays a theoretical foundation for the impact path and economic consequences of equity incentive on enterprise performance.Secondly,the development of listed companies and the implementation of equity incentive in China are analyzed,the background of equity incentive in listed companies is analyzed comprehensively,the whole process of equity incentive in three listed companies is combed,the financial analysis is carried out,and the performance changes before and after equity incentive are analyzed,points out that the equity incentive effects on business performance.Next,it focuses on the case study of Great Wall Motor,takes the equity incentive plan launched in 2019,2020 and 2021 as the main body,analyzes financial and non-financial indicators,evaluates the effect of equity incentive after implementation,and provides reference and suggestions for the future development of enterprises in the same industry.Due to the short interval and large implementation scale of the three equity incentive plans,and the corresponding adjustment of the plan issued in each phase,in 2019,the equity incentive plan was invalid due to the operating performance did not meet the vesting conditions,and then two successive equity incentive plans were issued,resulting in the limited impact of the plan on enterprise performance.It is found that the implementation of equity incentive method is difficult in procedure due to the late implementation of listed automobile enterprises and the majority of Chinese automobile enterprises are state-owned enterprises,which fails to play the expected incentive role.As a private auto company,Great Wall Motor still achieved positive growth in production,sales and revenue during the downturn of China’s auto market.The large-scale equity incentive implemented this time and the first batch of equity incentive lifted after the first exercise period in 2021 shows that there is an incentive effect on its performance growth.The analysis shows that its series of equity incentive plans have a certain promotion effect on its profitability and growth ability,but have no significant incentive effect on its solvency and operation ability.In terms of non-financial indicators,equity incentive has an obvious incentive effect on employee quality and professional level,and the company’s R&D investment is correspondingly increased.Finally,the average financial indicators of more than 160 auto companies listed in A-share market from 2012 to 2021Q3 are compared with the corresponding indicators of Great Wall Motor,highlighting the impact of the launch of equity incentive plan on Great Wall Motor’s business performance,analysis shows that equity incentive can make the enterprise when the overall market environment is down on the performance of the increase.On the whole,Great Wall’s equity incentive plan has produced positive effects to a certain extent,but there are still some problems.Finally,some suggestions and inspirations are put forward for the design of equity incentive schemes for listed car companies,providing some references for the adoption of incentive measures in the same industry.