Research On The Impact Of Equity Incentives On Corporate Innovation Performanc

Since the 50s of the 20th century,equity incentives have been regarded as a persistent incentive for employees and have been widely accepted around the world.In contrast to other nations,China’s research in this field is still in its early stages,and a perfect normative system for equity incentives has yet to be created.In the ever-evolving market rivalry,innovation has become a critical element in determining the competitive edge of small and medium-sized enterprises.For high-tech firms,the success of their business hinges on their innovation aptitude,and the enhancement of this aptitude necessitates a great number of professionals with professional expertise and abilities.The company,to draw in and motivate talent,provides certain shares through an equity incentive system,so that employees can reap the rewards of the enterprise’s progress and foster their talents to be utilized fully and contribute to the company’s growth.This paper aims to evaluate how equity incentives can promote the company’s innovation performance by analyzing Haier Smart Home’s equity incentive plan.This paper delves into the effects of Haierzhijia equity incentive on its innovation performance,beginning with an elucidation of the pertinent literature and theoretical basis.Subsequently,it examines the effect of equity incentive on the innovation performance of listed companies and furnishes a sound theoretical foundation for the advancement and thorough implementation of equity incentive.Case analysis is employed to analyze Haierzhijia’s innovation performance before and after the introduction of equity incentive,utilizing the number of invention patents,capitalization rate of R&D expenditure,new technology revenue,and other indicators.This enrichment of the case analysis articles furthers the investigation.At the same time,Midea Group and Gree Electric Appliances are selected as comparison enterprises for comparative analysis,by eliminating the other outside the equity incentive factors,to explore the frequency of different equity incentive scheme difference influence on the performance of enterprise innovation.Summarizing the pros and cons of Haierzhijia’s equity incentive,and proposing improvement ideas,this provides a benchmark for other businesses to follow in its footsteps.This paper proposes three suggestions to improve the innovation performance of listed companies: extending the validity period of incentives,enriching assessment indicators,and setting reasonable conditions for exercising options.Through analysis and research,it is concluded that equity incentive can be effective in achieving this goal by decreasing the agency cost of the company and obtaining employee recognition.