Study On The Motivation And Effectiveness Of The Implementation Of Class Ⅱ Restricted Shares In Gem Companies

Since the promulgation and revision of the Measures for the Administration of Share Incentives of Listed Companies,share incentive has increasingly become a mainstream tool for listed companies to bind their core employees and jointly promote the development of the company,and has been widely recognized by the market.However,limited by the policy,the incentive plan has been frequently revised and delayed,the incentive recipients are forced to give up subscription due to economic pressure,and the price is still upside down after the 50% discount,and the development of equity incentive is facing questions and resistance.Boosted by the GEM registration system reform policy,the second type of restricted stock incentive has developed rapidly,and new improvements such as relaxing the scope of incentive recipients,breaking the limitation of contribution time point and breaking the guidance pricing have successfully solved the above problems and gained the recognition of more and more enterprises.This thesis selects GEM listed company Wen as the case study to analyze its Class II restricted stock implemented in 2021,and the Class I restricted stock implemented in2018 is selected for comparison in order to better illustrate the incentive effect.The motivation for the implementation of the second class of restricted stock is presented based on the description of the differences in the design of the elements of the incentive program between the two periods.Then,through the comparative analysis method and event study method,the implementation effect of the equity incentive is analyzed in five aspects: governance capability,human capital,innovation capability,market response and operational performance.It is found that the incentive program is designed to improve the governance mechanism,break the talent dilemma,promote innovation and development,send positive signals and hedge against the market cycle,and its incentive-heavy program has certain positive effects in improving the governance ability and enhancing human capital,but the vesting target is easier to accomplish,which leads to the incentive program failing to significantly improve the company’s innovation ability and operating performance,and the market as a whole The market as a whole has a negative attitude towards this incentive program.The above analysis summarizes the unreasonable aspects of the second type of restricted stock incentive plan of Wen’s stock,and proposes targeted suggestions to improve the supervision system of equity incentive,construct comprehensive performance evaluation index,optimize the validity period and vesting arrangement,and set up graded assessment method.Meanwhile,in view of the strengths of the plan,we suggest the GEM enterprises to actively try the second type of restricted stock,apply optional indicators and flexible indicators,and help them to formulate the most sustainable incentive plan with the highest adaptability to the current development.