Analysis On The Motivation And Effect Of Equity Incentive Under The Background Of Mixed Ownership Reform

In the past decade,the reform of mixed ownership of state-owned enterprises has carried out vigorously.Many distinguished state-owned industries have taken the lead to inject new life into them and improve the performance of these enterprises.In order to deep the reform,many stateowned enterprises have carried out equity incentive to promote their mixedownership reform process,hoping to use equity incentive to promote the integration of new private enterprises and state-owned enterprises.At the same time,the state-owned industries want to use equity incentive to improve their performance.Based on the literature of domestic and foreign,this paper studies and analyzes the cases of Shanghai Jahwa implementing equity incentive under the background of equity incentive,focusing on the motivation and effect of equity incentive for three times before and after the mixed-ownership reform.The results show that the motivation of implementing equity incentive is different before and after mixed-ownership reform.Studies have found that the motivation of equity incentive is different in different backgrounds.Without the influence of mixed-ownership reform,the cause is to reduce the brain drain and motivate employees.After the mixed reform,enterprises have more motivation to implement equity incentive,such as promoting the integration of new and old enterprises,stabilizing employees’ emotions.At the same time,the reform also produce different effects to equity incentive.Taking the Shanghai Jahwa as an example,in a short period of time,the reform will play an positive role to equity incentive.Profitability,solvency,short-term and long-term market performance are in a positive trend.Meanwhile,R&D spending increases and the innovation ability is improved.However,as time goes on,the contradiction between the old and new enterprises gradually emerged.The contradiction between the Shanghai Jahwa and the Ping An gradually appeared and the conflict between the old and new management break out,which made the trend of Shanghai Jahwa take a sharp turn downward,resulting in a decline in financial indicators,market performance and innovation ability.In general,the influence of mixedownership reform on the motivation and effect of equity incentive is not absolute,which related to the degree integration of the two companies and the concept of the management and so on.This case can be used as a reference for companies that adopt equity incentive to deepen the process of mixed reform.