Design Analysis Of Equity Incentive Scheme For Listed Companies

With the development of modern enterprises,more and more companies are implementing equity incentive plans to alleviate the proxy problem,to tie employees and shareholders together,to avoid the self-interested and short-sighted behavior of employees and to focus on the long-term development of the company.Especially in the fast-growing new energy industry,as a talent and capital-intensive industry,high-quality talents and R&D and innovation capabilities are the key elements for the survival of the company.Therefore,companies in the new energy industry have issued equity incentive plans to attract high quality talents to join,enhance the company’s innovation ability and significantly improve the company’s performance.This paper selects Contemporary Amperex Technology Company(CATL),the first echelon of the new energy industry,as the research object.By combing through the four equity incentive schemes implemented by CATL for four consecutive years,we study the motivation for CATL to implement the equity incentive scheme,the design of its equity incentive scheme and the incentive effect.In the analysis of the design of the equity incentive scheme,CATL was compared horizontally with a comparable company in the same industry,Yiwei Lithium Energy,in accordance with the contractual elements,and a comprehensive analysis of CATL’ equity incentive scheme was conducted and suggestions for improvement were made.In analyzing the research on the effect of equity incentive,this paper analyses the impact of equity incentive on the company’s operation based on the staff structure and R&D innovation capability,uses the event study method to explore the shortterm market reaction brought about by the announcement of the equity incentive plan,and finally,for long-term financial performance,this paper evaluates CATL’profitability,solvency,operational capability and development capability by analyzing the changes because of implementation of equity incentive.The results of the study show that CATL has been able to achieve its long-term financial performance.The results of the study show that since the implementation of the equity incentive,the capital market has been positive,showing a positive market reaction in the short term;in the long term,the company’s operating capacity and development capacity and other important financial indicators have also improved significantly;the company’s staff structure has been improved,and the attractiveness of highly qualified personnel has increased,and the number of R&D personnel and the number of patents have increased.However,there are still many shortcomings in the design of the equity incentive scheme of CATL,such as the difficulty in meeting the performance assessment targets,the short incentive period and the weakened incentive.Through the study of CATL’ four equity incentive schemes in this paper,it is hoped that CATL can optimize the incentive schemes when designing future equity incentive schemes and provide experience and reference for other companies in the new energy industry.