Research On The Impact Of Equity Incentives On Corporate Performance Of UFIDA Networ

Equity incentives,as a long-term incentive mechanism to conditionally grant the company’s equity to employees,can motivate employees to create value for the company and achieve long-term stable development goals by giving them more ownership and forming a community of interest with the company.The emergence of the new crown epidemic in 2020 has shaken the world economy and inevitably affected our companies.In order to bring back the company’s performance,most of the companies put their eyes on the equity incentive,and there are more than 400 companies announced the equity incentive in 2022 only.Studying the impact of equity incentives on the performance of specific firms and summarizing experiences with equity incentives are important for designing equity incentive schemes for other firms in China and for establishing effective equity incentive mechanisms.In this paper,Yonyou,one of the leading companies in software services,is studied in this thesis.The company follows the development of China’s economic policy,and the Chinese Stock Incentive Policy was promulgated in 2005.The literature review will draw on principal-agent theory and other theories,benchmarking and event studies to examine the impact of equity incentives on firm performance.The paper concludes that,Yonyou’s equity-based incentives have a significant impact on profitability and the company’s ability to grow because they affect performance measurement,and the company should consider including the debt-servicing ability and operating ability indexes in the future equity incentive plan.In the non-financial aspect,equity incentive not only has a significant effect on attracting technical talents and retaining management talents,but also has a positive impact on improving corporate governance structure and market effect.In addition,the equity incentive program of Yonyou is evaluated in relation to the elements of equity motivation and the experience of its equityincentive program is used as a reference for other companies’ equity incentive programs.