H Electric Company Equity Scheme Incentive Design Research

In recent years, as the core competitiveness of enterprises, the value of humancapital is generally preferred in modern enterprises. The competitions is no longer theone among enterprises, but is essentially showing competition of talents. How tostrengthen human capital investment and establish an effective equity incentivemechanism is become an important competition advantage for enterprise’s survivaland development.Dispersed equity and complexity of decision-making and management in modernenterprise causing highly quality professional manager has become one of theindispensable factors of enterprise development. In order to effectively inspirit themanagement supervisors and renovate the incentive system, the equity incentivemechanism is adopted by most of world top500companies. Equity incentive, as akind of restricted incentive mechanism, can unify the both benefits of owners andmanagers, and also can solve a series of problems that may result in a relationshipbetween principal and agent, so it is very helpful to reduce management cost largelyand improve the overall revenue of enterprise. And it can not only highly incentive theenterprise’s original talents, but also attract more outstanding people to join thecompany by carrying out the plan of equity incentive. In addition, the abundanthuman capital will be formed eventually.As the imported product, the history of equity incentive is not really a long time,and the accumulation of development experience are also very limited in China. Thisis reflected not only in flaws of the design of enterprise’s equity incentive, but also inimmature and imperfect macro environment. For most of listed companies, it willresult in failure of equity incentive eventually because the program is difficult tosuccessfully implement and the long term benefits are ignored. Therefore, there is stilla long way to explore the equity incentive in China.Taking the H Company as the research object, this paper will mainly study threeparts of contents: firstly, the related theories of equity incentive will be understoodand grasped on the basis of an amount of domestic and international documents.Secondly, basic conditions of H Company will be introduced, and the macro andmicro environment of equity incentive in H Company will be analyzed, and also thepossible problems of equity incentive will be discussed, then the program of equityincentive for H Company will be designed with relevant laws and regulations of stock market. Lastly, some probable questions of the project will be analyzed and discussed.