Study On Exercise Performance Conditions Adjustment Of Equity Incentive In Emergencies

In recent years,the capital market faces uncertainty factors increase,earthquake,snow storms,sino-us trade disputes,the occurrence of emergent public health events of force majeure factors such as the smooth implementation of equity incentive of the enterprise and the appraisal of incentive object to produce a certain degree of "interference",especially COVID 2020-19 outbreaks,many affected by a lot of enterprise management,the completion of equity incentive performance objectives facing big challenge.With the improvement of the equity incentive policy,listed company equity incentive management approach gives greater autonomy,which adjust the equity incentive for the listed company under the emergency exercise performance conditions set provides the institutional environment of freedom,and,according to the announcement of the tide of information network enterprise statistics,there have been 40 listed company equity incentive plan because of the external environment change right to adjusted performance conditions.The adjustment made by the above-mentioned enterprises is not the same.Most enterprises choose to directly reduce the assessment standards or reduce the number of indicators,and some enterprises consider introducing relative performance indicators,but the number is small.If the design of performance conditions of downlink right in emergencies cannot reasonably avoid external risks,it may defeat the confidence of the management or induce the moral hazard behavior of the management,and weaken the effect of equity incentive.This provides an excellent perspective for the study of how listed companies adjust performance conditions of exercise under the background of emergencies in this paper.Based on the literature review at home and abroad,this paper introduces the relevant concepts of equity incentive,exercise performance conditions and relative performance evaluation,and studies the adjustment of exercise performance conditions under Wen’s stock emergencies by using the case study method based on the principal-agent theory and relative performance evaluation theory.It is found that although Wen’s stock has a good intention to adjust the performance conditions of exercise to control the risk,its index adjustment can not avoid the failure of exercise.Through the evaluation of Wen’s share adjustment plan,we find that it has the following shortcomings: the adjustment information disclosure is not sufficient;The adjusted indicators can not exclude the interference of emergencies;The evaluation dimension of relative performance index is single in emergencies;Unlocking requires lack of flexibility in case of emergency.Then this paper verifies the adjustment effect from the relative performance evaluation and absolute performance evaluation: first,the capital market has a negative response to the adjustment of Wenshi’s equity incentive exercise performance conditions,which has not been recognized by investors;Second,the adjustment of equity incentive fails to improve the management’s under investment behavior,which leads to the missing of a good period for the industry;Thirdly,it has no significant effect on attracting and retaining talents;Fourthly,the relative comprehensive ability generally declines and is overtaken by the same industry.The profitability and growth ability increase in the short term,but lower than that of the same industry.In the later period,the relative comprehensive ability does not rise but falls,and the solvency and operation ability have no significant improvement.Finally Suggestions listed company equity incentive under emergency exercise performance condition adjustment should pay attention to improve the internal management,and fully considering the external environment influence when making performance indicators,science combined with relative performance indicators and absolute performance indicators to be linked to the company’s performance effectively,hope in the uncertainty environment to play a role of a long-term equity incentive plan.