Research On The Causes And Economic Consequences Of CATL's Continuous Equity Incentive

In the process of modern enterprise development,the emergence of principal-agent conflicts has promoted the emergence of equity incentive mechanisms.In the increasingly fierce competition,in order to stabilize the core team and retain talents,enterprises will also attract employees by implementing equity incentives.This paper chooses CATL as a case company for research,the company was established in 2011 and listed in 2018.Since its listing,it has rapidly expanded to become a leading enterprise in the industry.Since 2018,CATL has launched an equity incentive plan,and has launched a continuous equity incentive in each subsequent accounting year.Firstly,this paper expounds the research background and significance from the origin and development of equity incentive system,and studies the continuous equity incentive in CATL through literature research,event research and case study.Secondly,the concepts of equity incentive and economic consequences are defined,and the literature review is carried out from the aspects of the motivation and economic consequences of the implementation of equity incentive.Then,it introduces the basic background of CATL,and combs the implementation of the four-phase incentive plan in CATL by collecting relevant information of equity incentive such as company announcement and annual report,and analyzes the motivation of the implementation of continuous equity incentive in CATL from both external and internal aspects.Finally,it analyzes the economic consequences of the implementation of continuous equity incentives from both financial and non-financial perspectives,and evaluates the implementation effect of the plan,and then proposes corresponding countermeasures.According to the result of case analysis,this paper concludes that the implementation of equity incentive in CATL has brought positive economic consequences to the company.From the financial point of view,it has improved the company’s operating capacity and profitability.From a non-financial point of view,continuous equity incentive has also had a positive effect on the R & D innovation and market performance of CATL.However,the problems in design and implementation need to be further optimized.For example,CATL’s performance evaluation index based on operating income is relatively single,and its set performance goals are achieved in advance during the equity incentive plan,resulting in the welfare of equity incentive,and there are also deficiencies in the assessment of employees in the assessment process,thus losing the incentive effect on employees.This paper argues that CATL should be appropriate to expand the scope of incentive objects and strengthen the strength of equity incentive.According to the company’s current development status of a comprehensive evaluation,we should set appropriate objectives and conditions,improve the staff’s confidence in the implementation of the company’s incentive plan,so as to enhance the incentive for employees.