Research On The Implementation Effect Of Foster’s Employee Stock Ownership Plan

As a long-term incentive measure,ESOP can,to a certain extent,alleviate the principal-agent problem by giving employees the status of owners of the company and motivating them to work.China’s employee share ownership schemes can be traced back as far as the reform of state-owned enterprises in the 1980 s,but were forced to be terminated due to imperfect systems in the course of implementation.Since the issuance of the 《Guiding Opinions on the Pilot Implementation of Employee Share Ownership Schemes in Listed Companies》 by the SFC in 2014,more and more companies have been practising them and further research on employee share ownership schemes has been carried out in academia.At the same time,the country has increased policy support for the new energy industry.As a key industry in the 14 th Five Year Plan,the photovoltaic industry has ushered in new development opportunities and flourished under policy support.This article selects Foster,who implemented ESOP earlier in the photovoltaic industry,as the research object.Through research,it not only enriches the research results of ESOP,but also proposes optimization suggestions that can further help Foster improve the implementation effect of ESOP.At the same time,it can provide certain reference for other enterprises to implement ESOP.Based on the principal-agent theory,human capital theory,incentive theory and signaling theory,this paper comprehensively analyzes the implementation effect of Foster’s ESOP by using literature survey,case analysis,event study and comparative analysis.Firstly,organize and review relevant literature on ESOP both domestically and internationally,define the concepts of ESOP and their implementation effects,and lay a theoretical foundation for the subsequent analysis.Secondly,introduce the background and motivation of the implementation of Foster’s ESOP,as well as the three ESOP and implementation process.Once again,from the perspective of market effects and corporate performance,combined with relevant enterprise data,analyze the implementation effect of Foster’s ESOP and conduct an overall evaluation.Finally,based on the analysis of the reasons why Foster’s ESOP did not meet expectations,relevant optimization suggestions were proposed for Foster’s ESOP in order to better play the incentive role of the ESOP and provide reference for other enterprises to develop ESOP plans.Research has found that ESOP can have a positive impact on corporate performance,improve the company’s debt paying ability,operational ability,and profitability,and enhance the company’s sustainable development ability.The implementation effect of ESOP depends on the ESOP plan.In addition,the design or selection of elements such as exercise conditions,shareholding period,employee shareholding ratio,and incentive object selection in the ESOP have a significant impact on the implementation effect of the plan.