Research On The Impact Of Equity Incentives On Innovation Of New Energy Enterprises

In recent years,under the background of revolution of the global energy setup,emerging energy industries such as solar energy and wind energy have risen.China’s new energy industry,especially the photovoltaic industry,has been able to overcome technical difficulties in the keen global market competition and achieved a number of independent research and development achievements.They have been no longer the ‘processor’ of foreign-funded new energy enterprises in the impact of multiple rounds of economic crises and industry policy changes.Technological innovation is the core driving factor for the growth of new energy photovoltaic enterprises,while talent is the core factor for technological innovation.As one of the most effective methods to solve the agency problem of enterprises,how does equity incentive motivate the core technical personnel of enterprises,thus driving enterprise innovation effectively? Therefore,this paper attempts to take a leading photovoltaic enterprise,in the new energy industry,Sungrow,as the research object to explore the impact of its previous equity incentive on enterprise innovation.Based on the information asymmetry theory,principal-agent theory,human resource capital theory and process incentive theory,this paper collates and summarizes the existing research on equity incentive,enterprise innovation and their relationship.Based on this,this paper firstly starts from the macro level,making statistics on the implementation of equity incentive by Chinese listed companies in the past decade.After that,the paper summarizes the development of the overall enterprise innovation level by citing the innovation index and conducts a brief analysis on the correlation between equity incentives and innovation levels of representative enterprises in the new energy industry.In the part of case study,this paper orders the overview of the previous equity incentive plans of Sungrow,and analyzes their motivation based on the domestic and foreign economic and industrial background at that time.This paper also calculates the excess cumulative rate of return for the implementation of equity incentive to reflect the response of the market to this initiative.In terms of the effect of equity incentive on enterprise innovation,this paper outlines the changes of relevant indicators reflecting the innovation level of Sungrow over the years.At the horizontal level,the paper select enterprises in the same industry that occupy similar industry positions,and select companies that have not implemented equity incentives to analyze their innovative development overview.After that,this paper also selects companies that have similar implementation dates of equity incentive,analyzes the similarities and differences between their equity incentive plans and the reasons behind them,and then quantifies and summarizes the sub indicators within the evaluation index system.Finally,through horizontal and vertical comparison,many factors affect the implementation effect of equity incentive are obtained,such as whether the difficulty of planned assessment indicators is reasonable,whether the industry environment is predicted precisely during the implementation period,whether the indicators are directly linked to innovation output,and the selection of incentive tools.In a word,new energy photovoltaic enterprises are vulnerable to the government policy,economy,upstream and downstream of the industry chain and other factors in the photovoltaic industry,which makes short-term performance fluctuations normal.However,in the long run,ability on innovation is always the driving force for enterprise scale expansion and profitability enhancement.Accordingly,the equity incentive of new energy photovoltaic enterprises should also be long-term,with the time matching the R&D project and cycle of innovation.The indicators should be directly linked to the innovation input and output,and core technicians should be the incentive object,rather than just focusing on the shortterm financial performance.