Research On The Causes And Economic Consequences Of The Termination Of Equity Incentives In High-tech Enterprise

Since the promulgation of the Administrative Measures for Equity Incentive of Listed Companies in 2006,more and more listed companies have implemented equity incentive for senior executives and core employees to improve the value of the company,and have achieved remarkable results.By the end of 2021,about 2358 listed companies in China have launched equity incentive plans.However,compared with foreign countries,China’s capital market is not perfect,and enterprises implement equity incentives later.Therefore,there are still some problems in the implementation of equity incentives.With the continuous growth of the number of companies that have launched incentive plans,these problems have become increasingly prominent,and the termination of equity incentives has also become more and more frequent.On this basis,this paper studies and discusses the causes and economic consequences of the termination of equity incentive plans.This paper first combs and summarizes the domestic and foreign literature on equity incentive,and combines the principal-agent theory,human capital theory and incentive theory to lay a theoretical foundation for the case.Then the paper summarizes the implementation of equity incentive in high-tech enterprises,selects Tianbang as a case study,first introduces the implementation of the two equity incentive plans of Tianbang,and then analyzes the reasons for the termination of the equity incentive of Tianbang and the economic consequences.In this case,the first equity incentive of Tianbang Shares was terminated due to the high exercise conditions and unreasonable assessment indicators.The second equity incentive plan was also affected by changes in the external business environment and related policies,and ended in failure.As for the economic consequences of the termination of the two equity incentives of Tianbang Shares,this paper analyzes them from four perspectives:market reaction,financial performance,executive stability,and innovation ability.The study found that the market reaction to the second termination of the short-term market was positive,while the first termination of the equity incentive gave a negative response.In addition,the termination of the two equity incentives has had a negative impact on the stability analysis,financial performance and innovation ability of Tianbang’s senior executives.At present,there are few studies on the termination of equity incentives.This paper selects representative enterprises to analyze the causes of the termination of equity incentives and the economic consequences it brings to enterprises through case studies,which can provide case support for the empirical test results.The research content may be innovative.In addition,because this article selects a single case,it may have some limitations.I hope to carry out relevant research on the termination of equity incentive of other listed companies in the future to expand the research scope of equity incentive.