The Impact Of Equity Incentive On Corporate Performance In Listed Companies

With the continuous development of the enterprise,the conflict of interests between the owner and the operator of the enterprise becomes more and more obvious,which also leads to the separation of the ownership and management rights of the enterprise.The establishment of equity incentive plan is also to solve this contradiction.The equity incentive plan is becoming more and more perfect after continuous development.Listed companies will also choose to stabilize the talents of the enterprise through multiple implementation of the equity incentive plan,and enhance the sense of belonging of each employee to the enterprise.As a leading enterprise in the communication equipment industry,ZTE announced the implementation of equity incentive plans in 2006,2013,2017 and 2020.This paper selects ZTE as the case enterprise.Based on the impact of equity incentive on enterprise performance,this paper first introduces the research background and significance of equity incentive,and then reviews and summarizes the literature of domestic and foreign scholars on the relationship between equity incentive and enterprise performance at the current stage.Then this paper introduces the situation of ZTE’s industry and the development process of ZTE,compares and analyzes the contents of its four equity incentive schemes,and analyzes the implementation effect of ZTE’s equity incentive thorough the financial performance and non-financial performance on the basis of relevant theories.Finally,by analyzing the deficiencies of ZTE’s equity incentive plan,we give corresponding suggestions and the final conclusion of this paper.After the analysis of ZTE’s equity incentive plan,it showed that the implementation of the equity incentive plan has a positive impact on ZTE’s performance.In terms of financial performance,the profitability and growth ability are significantly affected by the equity incentive plan,which has a positive effect.The solvency and operating ability are not significantly affected by the equity incentive plan.The main reason is that ZTE did not consider the indicators of solvency and operating ability when formulating the equity incentive plan.At the same time,the duration of the equity incentive plan also makes the incentive objects,In particular,ZTE’s management personnel take short-term actions to achieve the assessment objectives.In terms of non-financial performance,the implementation of the equity incentive plan can promote the R&D investment of ZTE to a certain extent,and can stabilize the company’s highly educated talents.Finally,in view of the problems existing in the equity incentive plan of ZTE,this paper proposes that more incentive objects,performance evaluation conditions with certain difficulties and relatively longer incentive time limit are the key to achieve better incentive effect of equity incentive,hoping to provide reference for the equity incentive plan of ZTE and other listed companies in the industry.