| With the release of the "Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Plans for Listed Companies" by the China Securities Regulatory Commission in June 2014,there has been a boom in the implementation of ESOPs among listed companies in China.Compared to the more restrictive equity incentives,ESOPs have a stronger autonomy,and many listed companies have innovatively launched various types of ESOPs,but the results are not satisfied.The original intention of ESOPs is to motivate employees,but in practice,companies may launch ESOPs for various non-motivational motives,which makes the ESOPs distorted and becomes a tool for a few insiders to encroach the interests of external minority shareholders,consolidate the position of controlling shareholders and manage market value.In particular,the "Zero-Cost" ESOPs implemented by more companies in recent years have caused controversy in both theoretical and practical circles.All this confusion has led to the question of what motivates companies to implement "ZeroCost" ESOPs.Can the ESOPs with "impure" motivations bring incentive effect to the company?Based on a literature review of the motivations and effects of ESOPs,this thesis analyzes the motivations of "Zero-Cost" ESOPs in listed companies by applying principal-agent theory,human capital theory,tunnel-digging theory and signaling theory,and analyzes the economic consequences of "Zero-Cost" ESOPs based on the efficient market hypothesis,stakeholder theory and "horsefly theory".At the same time,a relevant theoretical analysis framework is constructed.On the basis of the theoretical analysis,the "Zero-Cost" ESOPs of Korrun was conducted as a case study to analyse in detail the specific scheme of the ESOPs,and to analyse the motivation for the implementation of the ESOPs by the company.The market reaction to the "Zero-Cost" ESOPs was studied using the event study method,and the impact of the company’s ESOPs on its financial and non-financial performance was analysed in detail using the comparative analysis method.The study found that(1)The "Zero-Cost" ESOPs implemented by Korrun has the characteristics of narrow coverage of incentive targets with a bias towards senior management,shares are bought back in the secondary market,no employee contribution is required,the lock-up period is short and the performance assessment targets are relatively lenient.(2)The main reasons for implementing the "Zero-Cost" ESOPs are: to provide benefits to some executives,to attract and retain outstanding talents,to cope with market competition,to cooperate with executives to reduce their shareholdings for profits and to reduce the risk of liquidation;(3)The "Zero-Cost" ESOPs was only implemented for the first time with a strong market reaction and a short-term increase in the company’s share price,while the long-term market reaction was lukewarm;(4)The implementation of the "Zero-Cost" ESOPs by Korrun has improved the profitability and growth capacity of the enterprise to a certain extent,but has little impact on the operating capacity and solvency;(5)The impact of the "ZeroCost" ESOPs on the non-financial performance of the company is mainly manifested in: the professional composition and education level of the employees have been greatly improved,the company’s R&D innovation has been promoted to a certain extent,but the improvement on the indicators of revenue and profitability per capita is limited.In response to the above findings,this thesis makes some recommendations from the perspectives of listed companies,market investors and regulators respectively.This thesis has 27 figures,27 tables and 63 references. |
