Research On The Effectiveness Of Our Equity Incentive

With the continuous expansion of the scale of modern enterprises,corporate ownership and control separate, and this will inevitably lead to a company's senior manager as operator and the company's shareholders as owner occur the inconsistency between objectives and interests,this inconsistency will undoubtedly produce the commissioned agent problem for enterprises, but the key to solve the problem is how to stimulate the operators to work farthest for the company's shareholders. Therefore, the operator with effective incentives will become the studied focus of domestic and overseas scholars. Abroad, the system has been well developed and the relevant laws is relatively sophisticated. In contrast, China's development is relatively slow, While some listed companies have begun to formulate and implement the stock option incentive plan, but whether it work in China? Can it really play the role of incentives as well as how to measure the effectiveness? this paper studies all these issues both form theoretical and positivismic aspect.This paper discusses the concept,form, function and theory of analysis, and defines the concept of the equity incentive compensation that is "mainly refers to stimulate the company directors, supervisors and senior managers, key staff and other personnel in the form of our company's stock and it is a series of rules aim at long-term stimulation" .And the paper believed that the essence of the mechanism is "the owners give up the part of the ownership and offer the operater to a shareholding identify to entitile the executives to benefit for the shareholding through as part of corporate decision-making, profit-sharing, risk taking.and in the past it expects that the interests of shareholders and operators will maintain its consistency. " Secondly, Through summarize the viewpoint of the domestic and overseas scholars about the equity incentive form ,the paper put forward the major stock incentive form suited China's listed companies that is stock options, restricted stock, performance stock, phantom stock and so on.Once again,Through talking about the development of the stock incentive plan as well as summing up the effectiveness of domestic and international scholars,the paper proposed this effectiveness of stock incentive compensation that are both positive and negative effects that the"interest alignment"and the"interest entrenched"as well as discussed the performance and the measurement standards of this two effectiveness.Followed by Study China Vanke Company Case to verify the effectiveness of such stock incentives plan.At last,the paper concluded China's current problems and put forward to enhance the effectiveness of our stock incentive plan that aimed at these questions.the enhanced apporoch are as follows:optimizing the implementation of stock incentive plan internal and external environment, policies and regulations; Development suited to China's national conditions equity incentive plans'models and programs, do not blindly copy other countries;Establish a complete system standards that measures stock incentive plans'effectiveness; Improve the governance of listed companies and form an effective internal oversight mechanisms and so on.