| Equity incentive is a form of incentive by giving employees to hold shares or equity options in the company to stimulate their enthusiasm and creativity and to improve the performance and competitiveness of the enterprise.Since the introduction of the shareholding reform,many enterprises in China have adopted equity incentives.However,due to the lack of comprehensive consideration of the development stage of the enterprise when designing the equity incentive scheme and the improper implementation of the incentive measures,some of the equity incentive schemes have failed to achieve the expected effect and have even been abused by the management and become a means of arbitrage.According to the life cycle theory,the financial situation,strategic goals and development needs of an enterprise will change over time,therefore,when formulating an equity incentive plan,the life cycle characteristics of the enterprise should be taken into consideration and appropriate incentives should be adopted.Based on this,this paper collects and organizes the domestic research literature related to equity incentive and corporate life cycle,and summarizes the concepts of corporate life cycle and equity incentive,as well as corporate life cycle theory,principal-agent theory,incentive theory and human capital theory as the theoretical basis for the paper.Based on these researches,we have proposed suggestions for optimising HK’s equity incentive model,and concluded that we can provide reference suggestions for other enterprises to implement equity incentives.The research conclusions of this paper.It is found that the life cycle of HK companies is divided into two stages: the growth stage and the maturity stage.The effectiveness of HK companies’ equity incentives in both stages is remarkable,but there are still certain problems,the selection of incentive targets and the setting of assessment indicators are inadequate in the growth stage,while in the maturity stage,the restricted stock incentives carried over from the growth stage can no longer adapt to the development requirements of the company in the maturity stage,and the implementation of In the maturity stage,the restricted share incentive measures carried over from the maturity stage are no longer suitable for the company’s development requirements and the effectiveness of their implementation is limited.Therefore,in view of the problems of the equity incentive strategies in the two periods,the study concluded that when adopting equity incentive strategies,enterprises need to take into account the characteristics of the enterprise life cycle,adopt restricted stock incentive strategies in the growth stage,choose the employee follow-on mechanism in the maturity stage,establish a professional equity incentive platform and improve the information disclosure system in order to better achieve the effectiveness of equity incentives.By using theories such as life cycle theory,questionnaires and case studies as tools,we conducted an in-depth investigation and analysis of HK’s equity incentives in the two periods and proposed corresponding solutions to the problems that arose,with the aim of helping the company to better manage the risks and rewards of its equity incentive plan and thus improve its corporate performance and competitiveness. |
