Research On Equity Incentive Scheme Under Dual Ownership Structure

In January 2019,the Shanghai Stock Exchange issued the Listing Rules of shares on the science and Innovation Board of Shanghai Stock Exchange,which made it clear that differentiated voting rights can be set,and the form of dual ownership structure has entered the attention of the public.Different from China’s traditional same share and same right,the dual ownership structure divides the voting right and cash flow right of shares,and sets up shares with higher voting right,which can enable listed companies to strengthen the control of major shareholders while financing and listing.However,in the case of more centralized control of the enterprise,the principal-agent contradiction between major shareholders and management has also been further intensified.Under this background,the principal-agent system may weaken the incentive effect of enterprises.Therefore,how to optimize the equity incentive scheme on the premise of ensuring the control of major shareholders over the enterprise,so that the equity incentive can achieve its original effect has become the problem to be studied in this paper.Firstly,this paper analyzes the implementation of the current dual equity system of China’s science and innovation board and the overall situation of the equity incentive scheme design of listed enterprises on the science and innovation board,summarizes the problems existing in the two systems from a macro perspective,and puts forward more targeted countermeasures for the design and optimization of equity incentive scheme.Secondly,due to the highly similar design of the dual equity system between the Hong Kong Stock Exchange and the Shanghai Stock Exchange,this paper selects Xiaomi company listed on the Hong Kong Stock Exchange as a case enterprise.Finally,through the analysis of Xiaomi’s equity structure,the introduction and comparison of equity incentive schemes before and after listing,and the analysis of the implementation effect of equity incentive scheme,this paper evaluates its equity incentive scheme after listing,analyzes its advantages and disadvantages,and provides equity incentive scheme design reference for other companies listed with dual equity structure.Through the above research,combined with the problems existing in the macro environment and the advantages and disadvantages of the Xiaomi company,this paper puts forward the Optimization Countermeasures for the equity incentive scheme of listed companies with dual equity structure:increasing equity incentive methods such as virtual equity,establishing equity incentive implementation supervision committee,building a parallel and transparent employee assessment system,and the source of entity shares used for incentive is mainly repurchase.