Analysis On The Motivation And Implementation Effect Of Equity Incentive In Yili Group

The separation of ownership and management rights of modern enterprises will lead to the inconsistency of interests between the principal and the operator,increase the principal-agent cost,improve the operation risk and cause the principal-agent problem.Equity incentive system points out the direction to solve this problem,more and more companies will use equity incentive to reduce business risks and resolve the principal-agent problem.Equity incentive system is to link the salary of employees with the performance of the enterprise through a series of incentive schemes,bind the personal interests of employees and the interests of the enterprise,and rely on each other to become a community of interests.Equity incentive can stabilize the governance structure,prevent the loss of core employees,and allow employees to participate in stock ownership to obtain benefits,so as to attract internal and external talents,form a long-term incentive mechanism,and encourage the encouraged objects to make long-term contributions to the development of the enterprise.This paper selects Yili Group,the leader of dairy industry,as the research object,and adopts three research methods: literature research method,case analysis method and comparative analysis method.Firstly,it analyzes the research results of academic circles at home and abroad,and comprehensively and systematically combs the research status of equity incentive by scholars at home and abroad.Then it explains the related concepts of equity incentive and expounds the theoretical basis on which this paper is based.Then introduce the basic situation of Yili,understand its development history,the company’s current governance structure and the background of implementing equity incentive.Yili Group,as the leader in the dairy industry,has implemented equity incentive plans for three times,respectively in 2006,2016 and 2019.After the completion of the equity incentive plan and the final implementation of Yili,we have an in-depth understanding of the background and motivation of the group.Analyze the change trend of the company’s profitability,operation ability and development ability before and after the implementation of the three equity incentive schemes with financial performance indicators,comprehensively analyze the company from non-financial indicators such as employee changes,market response and innovation level changes.Explore the reasons for the successful implementation of Yili equity incentive,summarize the deficiencies,and provide reference and experience for dairy products and other industry companies to implement equity incentive plan.Through the above research and analysis,it is concluded that Yili has the advantages of appropriately expanding the incentive scope,flexibly selecting the incentive mode and conforming to the company’s strategy in several equity incentives,at the same time,there are also problems of short-term incentive and simple exercise assessment indicators.Finally,the experience shows that when designing equity incentive schemes,other companies should fit in with the internal and external environment,reasonably determine the incentive scope and improve the performance appraisal system.