Research On The Motivation And Effect Of Implementation Of Oriental Yuhong’s Equity Incentive

As a medium and long-term incentive method,equity incentive can not only retain and attract talents,but also effectively solve the principal-agent problem of the company,so that the shareholders,management and employees can achieve a win-win situation,which has far-reaching significance for the steady development of the enterprise.With the high-quality development of China’s economy,equity incentive has been improved with policy support and applied in most company management.In recent years,waterproof industry competition incentive,facing domestic and foreign enterprises to compete for the market.As a result,many companies in the waterproofing industry have implemented equity incentive plans to leverage human capital to promote innovation and accelerate the introduction of new products in order to survive in the Red Sea market.Based on a large number of highly cited literature,this paper sorts out concepts,characteristics and theoretical basis related to equity incentives,and obtains data resources through Choice financial terminal,Ifind database,Wind database,and some research reports.After getting familiar with the general situation of equity incentive of Chinese listed companies,combined with the characteristics and motivations of equity incentive of most enterprises,Beijing Oriental Yuhong Waterproof Technology Co.,LTD.(Oriental Yuhong,stock code 002271)is taken as the case study object for analysis.Oriental Yuhong is in the waterproofing industry with fierce competition.Although it is in the leading position in the industry,the company still faces the problems of expanding market share,attracting and retaining core talents,reducing accounts receivable,reducing agency costs and improving governance structure.These reasons promote the company to implement equity incentive and partner plan.By the end of 2021,Oriental Yuhong has implemented four equity incentive plans,among which the first three periods are restricted stock incentive,the first period is option incentive,and the partner plan is combined with the later three equity incentive periods.This paper introduces the above motivation in detail,sorts out the specific equity incentive plan of Oriental Yuhong for each period,and summarizes their characteristics by observing the plan: high intensity and large scale,focusing on the incentive of core personnel such as sales and technology,multiple and effective incentive tools,and the combination of incentive and corporate strategy.Then,from both vertical and horizontal dimensions,it analyzes the influence of equity incentive on Oriental Yuhong’s corporate performance.In terms of non-financial performance,Through market share,"main business profit/main business income",the proportion of high-end talents,the number of core talents,research and development innovation index,management expense ratio,other receivables in the total assets at the end of the year,the shareholding ratio of top five shareholders of equity balance degree and other indicators,the vertical analysis of the impact of equity incentive on the non-financial performance of the company.According to the trend chart,it can be found that during the equity incentive period,Oriental Yuhong’s market share and market competition level are improved,high-end talents are increased,innovation investment is increased,the first agency cost is significantly reduced,the second agency cost is relatively stable,and the ownership structure is optimized.Therefore,the non-financial performance of Oriental Yuhong is good.In terms of financial performance,Keshun Waterproofing Technology Co.,LTD.(Keshun Stock,stock code 300737),which is also a leader in the waterproofing industry,is selected for horizontal comparison,and discussed from five directions: In this paper,net operating cash flow is selected to evaluate the company’s cash flow situation,earnings per share,return on equity and return on total assets are selected to analyze profitability,current ratio,quick ratio and cash flow ratio to analyze debt paying ability,accounts receivable turnover rate and total assets turnover rate to analyze operating ability.Ability to analyze and develop the growth rate of total assets,main business revenue and net profit.The results showed that Oriental Yuhong also performed very well in terms of financial performance.After that,the economic added value of Oriental Yuhong was evaluated,and the overall EVA value showed an upward trend.Oriental Yuhong is one of the listed companies with remarkable implementation effect of equity incentive.We naturally come to the following conclusions through the research: Oriental Yuhong’s equity incentive plan is continuous and adjusted according to strategic needs;The design of equity incentive scheme overall implementation effect is good,suitable for waterproof industry;Equity incentive is based on the good organizational structure of the company.Other companies can refer to the case of Oriental Yuhong and combine it with corporate strategy when implementing equity incentive.Improve the assessment and unlock requirements;Innovate incentive model and consolidate good institutional foundation.