Research On Equity Incentive Effect Of Listed Companies In Communication Industry

Equity incentive is an effective long-term incentive to improve the strength of a company by giving some employees a certain number of shares in the company to achieve a pre-agreed performance target.This incentive mechanism was introduced into China at the end of the 20 th century and in 2006 the Securities Regulatory Commission formally formulated and began to implement the Measures for the Administration of Equity Incentives for Listed Companies.Since then,with the continuous improvement of this incentive mechanism,equity incentives have been widely used in Chinese enterprises.The communication industry is an important part of the state-supported high-tech sector,and in recent years has increasingly chosen to implement equity incentive plans for its own development.According to relevant statistics,as of 2022,more than half of the companies in the communications industry have made announcements regarding equity incentive plans.Company G is one of the companies in the communication industry that has implemented the largest number of equity incentive plans,with specific incentive plans announced in 2010,2014,2017,2019 and2022 respectively.The company’s incentive periods are relatively continuous and it has a high industry representation and research value.Therefore,this thesis selects Company G as a representative company in the communication industry for the case study.After introducing the basic information of Company G,it is found that the implementation of equity incentive is influenced by the improvement of incentive mechanism and the external environment of rapid development of the industry on the one hand,and the internal needs of the company to continuously improve its performance,build up its talent team,enhance its innovation ability and improve its corporate governance on the other.Then the specific content and exercise of the five consecutive incentive plans of Company G are introduced,and the elements in each incentive plan are compared and analyzed,and it is found that the design of the incentive plan of Company G has become more and more perfect as the equity incentive continues to deepen.A combination of financial and non-financial indicators is then used to analyze the specific effects of the company’s incentives in terms of market response,financial performance,human capital,innovation capability and corporate governance,in relation to the company’s incentive drivers.Based on the above analysis,it is concluded that: firstly,the scope of incentive of Company G is expanding and the core employees are the main incentive targets,but the indicators of unlocking conditions are set in a single way;secondly,the short-term market effect of incentive of Company G is poor,but the long-term operation effect is good.On the basis of the conclusions,the current situation of equity incentive in the communication industry is taken into account,and suggestions are made to Company G and other enterprises in the same industry to increase the incentive strength,diversify the assessment indicators,reasonably determine the scope and time of incentive and optimize the equity structure when implementing the equity incentive plan.