Research On Equity Incentive Effect Of China Unicom Under The Background Of Mixed Reform

Equity Incentive originated in the 1950 s,mainly used to solve the agency problem in enterprises.Since the Third Plenary Session of the 18 th Central Committee of the Communist Party of China(CPC)in 2013 proposed to "Actively promote mixed ownership economy and allow employees of mixed ownership enterprises to hold shares",more and more enterprises have begun to implement equity incentive system by taking advantage of the opportunity of mixed ownership reform.However,the equity structure of state-owned enterprises is usually relatively simple,and the supervision mechanism is poor,which leads to an increase in the risk of loss of state-owned assets arising from the implementation of equity incentives.In order to protect state-owned assets,they are subject to strict policy constraints,resulting in a slow process of equity incentives for state-owned enterprises.Since the release of the Opinions on the Pilot of Employee Stock Ownership in State holding Mixed Ownership Enterprises in 2016,the equity incentive of state-owned enterprises has ushered in a new round of development opportunities and started to explore their own equity incentive model.Restricted stock is the most commonly used equity incentive method in the current market.However,due to the large size of state-owned enterprises,the implementation of mixed reform and equity incentive involves a wide range of areas and is difficult to operate,and there are not many state-owned enterprises using restricted stocks,so the incentive effect of restricted stocks in state-owned enterprises is questionable.In addition,most of the existing scholars’ research on equity incentive under the mixed reform of state-owned enterprises focuses on theoretical analysis and empirical research,and there are few relevant case studies.This paper selects two restricted equity incentive plans of China Unicom,a state-owned enterprise in the telecommunications industry,as the research object.First of all,it combs the literature related to the mixed reform of domestic and foreign enterprises,equity incentive and equity incentive under the mixed reform;Expounded the theoretical basis of stakeholder theory,principal-agent theory and incentive theory,introduced the specific implementation plan of China Unicom’s equity incentive from the incentive object,exercise price,holding period and unlocking conditions,and analyzed the implementation motivation of China Unicom’s equity incentive;Secondly,this paper uses the event study method to analyze the short-term market reaction of the two equity incentives,uses the financial indicator method to analyze the long-term financial performance from profitability,solvency,operating ability and development ability,and uses other relevant indicators to analyze the impact of equity incentives on non-financial aspects such as equity structure,R&D ability,talent structure and investment efficiency.Finally,it analyzes the existing problems of China Unicom’s equity incentive and puts forward corresponding countermeasures.This paper argues that the mixed reform of China Unicom has provided a favorable environment for the smooth implementation of equity incentive,and the equity incentive has also achieved the expected incentive effect.Through the above analysis,the results of this paper are as follows:First,the two restricted stock incentive schemes have significant positive effects on short-term market performance;Second,equity incentive optimizes the equity structure of the enterprise,stimulates the vitality of employees,and improves the innovation ability and enterprise performance;Third,the two restricted stock plans of China Unicom have some problems,such as single incentive mode,single non-financial indicators and lack of effective internal supervision mechanism.Accordingly,countermeasures are proposed from three aspects,namely,incentive mode,non-financial indicators and internal supervision.In terms of incentive methods,different types of employees adopt different incentive methods;Add non-financial indicators such as customer satisfaction and number of patent applications in the assessment indicators,In order to maximize the incentive effect of restricted stocks in enterprises.There are two main innovations in this paper:First,innovation in research perspective.Based on the background of mixed reform,this paper analyzes the motivation of equity incentive and its effect on enterprise performance.The second is the innovation of research content.Based on the analysis of the motivation,path and effect of China Unicom’s equity incentive,this paper also studies the shortcomings of its equity incentive plan and puts forward suggestions for improvement,so it has certain innovation in content.