Motivation And Effect Analysis Of NAURA’s Equity Incentives

The rise of artificial intelligence,5G and other technologies and the continuous advancement of the commercialization process have brought about a new round of growth and change in the semiconductor industry.While the global chip production capacity is increasingly tight,my country’s semiconductor industry has also ushered in good development opportunities.However,my country’s semiconductor companies still have problems such as lack of core technology,serious brain drain,and weak governance capabilities,and their development has been greatly hindered.In this situation where opportunities and challenges coexist,many semiconductor companies urgently need to implement equity incentive plans to make progress in technological innovation,corporate governance,and talent introduction,so as to better seize industry development opportunities.At present,there are few studies on equity incentives for semiconductor companies.In today’s economic industry context,what should semiconductor companies do to implement equity incentives,whether they can maintain and attract talents,enhance internal governance,and improve corporate value and core competitiveness.The effect is still worthy of our study.This thesis takes NAURA,a leading domestic company in semiconductor equipment,as an example to analyse its two equity incentive plans’ program features,implementation motivations and effects in 2018 and 2019.The first equity incentive plan in 2018 is mainly for core technical talents and middle-level management backbones.While the second plan 2019,executive directors and subsidiary executives are also included in the scope of incentives.The selection of incentive objects is targeted,and the incentive model is more compatible with the object also.The two phases of the company’s plans have the commonality of attaching importance to innovative R&D capabilities and core talents,which is in line with the motivation for implementation.After analysis,the implementation of NAURA’s equity incentives is mainly driven by four motivations: first,to reduce agency costs and improve corporate governance.The second is to retain and attract core talents and reduce the human capital risk brought by the transfer of the semiconductor industry to the company;the third is to alleviate the risk of technological update and enhance the technological innovation capability;the fourth is to improve performance and competitive position in the competitive semiconductor equipment market.NAURA hopes to achieve the above goals through equity incentives,thereby enhancing the company’s comprehensive strength and core competitiveness.This thesis analyzes the implementation effect of equity incentives from the aspects of capital market response,agency costs,financial performance,talents and innovation,and draws the conclusion through the event research method and horizontal comparison of industry averages: equity incentives have played an important role in the development of NAURA.positive effect.Specifically,the capital market of equity incentives responded positively,producing short-term wealth effects,and the agency cost reduction effect and financial performance improvement effect were obvious,indicating that equity incentives stimulated the enthusiasm of employees and management to improve performance.At the same time,after the equity incentive,the overall educational quality of employees has been improved,and the R&D investment and innovation achievements have increased,which has promoted the introduction of talents and innovative R&D.Finally,after analyzing the incentive objects and incentive models of NAURA,which are reasonable and highly adaptable,and focus on innovation in assessment,this thesis draws some inspirations from it,that is,semiconductor companies should pay attention to core technical personnel when implementing equity incentives,and focus on innovation assessment when setting assessment indicators.,enterprises should pay attention to the debt risk prevention after equity incentives,etc.The analysis and conclusions of this paper can provide some reference and reference for the implementation of equity incentives for other semiconductor companies in my country.