Analysis On Implementation Effect Of Equity Incentive In STAR Market Enterprises

In June 2019,the Shanghai Stock Exchange officially launched the China Science and Technology Board.STAR Market will be set up to provide strong support for the financing of domestic technology and innovation companies.It will enable the capital market to focus on innovative technology companies with large investments,long R&D cycles and high operational risks,and provide space for start-up and expansion of new technology companies.STAR Market will be a key platform to help us develop our industry and overcome technical constraints.As firms included in STAR Market clusters show clear signs of technological innovation,they need to rely on innovation in products or services to keep and increase their competitiveness.As a matter of fact,the growing competition between scientific innovation companies has made the role of professionals more and more important in the sustainable development of enterprises.Therefore,how to attract and retain high technology personnel to guarantee the continuous innovation of enterprises has become a major problem related to the survival and development of science and technology board companies,and is becoming a hot topic in the field of research.Driven by the key question of how to help companies attract and retain talent and unlock its full real value,equity incentives are gradually making their way onto the Times stage and into the spotlight.Equity-based incentives have become the first choice for most companies to ease the pressure on employment,as they are highly attractive and have long-term staying power.Equity incentives initially arose in the context of separation of ownership and operation.By the 1950 s,share ownership had gradually become a common method of motivating companies.In fact,equity incentive is gradually popular in modern enterprises because it can not only alleviate agency costs,optimize corporate governance structure and improve performance,but also attract and retain talents by giving stock rewards to core employees to give full play to the real value of talents.Since December 2005,the China Securities Regulatory Commission issued Administrative Measures(Testing)on Listed Companies’ Stock Incentives,which have supported the continued development and improvement of the Chinese stock incentive system as well as the promotion and gradual introduction of stock incentives in listed companies.But considering the reality in China,the Science and Innovation Panel has only been operational for a short period of time.Its strategic position and characteristics are clearly different compared to those of core companies,GEM and other management companies.In addition,Since the development of equity incentives in China is relatively late,it is necessary to reform and upgrade the system so as to reflect the features of the research and development board.As a matter of fact,there are a lot of factors that affect the delivery of equity incentives and make full use of the good effects of the scientific innovation companies,such as the establishment of the incentive mechanism,the size of the incentives,the conditions of use and other elements of the equity incentive scheme.The company’s industry,operation conditions and strategic goals affect the final share incentive scheme,and the effect of this incentive can be very different.In 2019,AMEC was one of the first companies to be included in STAR Market.Its research data is more sufficient,the size and type of enterprises are typical.Therefore,in this paper,AMEC is selected as an example to enrich theoretical research about STAR Market’s share incentive,but it can also serve as a reference for other companies in the same field,and promote the application and development of STAR Market share incentive.This thesis combines theoretical research and case studies to write the full text.The details are as follows: Firstly,beginning with a research background and practical meaning,the relevant theoretical studies of domestic and foreign researchers are summarized and the literature review is conducted around three aspects: technology innovation enterprises,equity incentives of technology innovation enterprises and equity incentives.Secondly,the concept and content of Science & Technology Innovation Board and Science & Technology Innovation Board are expounded,and introduces the current incentive model adopted by science and technology innovation board enterprises.Meanwhile,the theory of Principal-Agent,Human Capital and Two Factors theory are used to provide a good theoretical foundation for further analysis.Thirdly,the case is introduced from four aspects:The basic conditions of the company,the reasons for carrying out the share incentive,the concrete content of the incentive plan and the characteristics of the incentive system.Part two is the main content of this paper,which is divided into two sections for analysis.The first part analyses how share incentives are implemented in AMEC.Through analysis,it is found that the incentive object can take positive actions after being motivated by reasonable setting of incentive scope and exercise conditions,so as to optimize decision management and reduce enterprise agency cost.Research and development innovation ability improvement and other performance.Second,three aspects of equity incentive schemes for AMEC are analyzed in terms of financial performance,non-financial performance and market response,and the practical implications of implementing equity incentives for AMEC are summarized.By analyzing the equity incentive case of SMIC,this thesis can draw the following conclusions:the introduction of equity incentives in micro and medium-sized enterprises has a positive impact on business as a whole.In addition to improving the overall financial performance,it is more important to attract and retain talents,improve the company’s R&D and innovation ability,and show a positive response to the capital market.In addition,Some research initiatives are also planned for other companies in the Research and Innovation Council(RIC).Listed companies on the Innovation Board,for example,should continue to adjust according to the changes in external and internal conditions and operational issues,such as setting diversification of exercise conditions and extension of the duration of incentives.