A Study On The Effect Of Orient Lanscape’s Equity Incentive Program

Stock option incentive is a method of incentive scheme which Company will rewards manager layer the stock option based on the performance of managers, in order to encourage managers to serve the company for a long term period. Stock option incentive scheme is one of the important method of incentive mechanism which can also solve the problem of "principal-agent" problem between owners and managers. Meanwhile this method has been widely used by public Company. At the same time Stock option incentive scheme can be a positive role in improving corporate governance structure, improve the efficiency of management, and strengthen the company’s cohesion and enhance market competitiveness, etc.Recent years, From the Stock option incentive scheme of public company in our country, we can acknowledge that the proportion of small and medium-sized enterprises are increasing. This paper takes the Stock option incentive scheme of the“Beijing Orient Landscape&Ecology Co.Ltd.” as an example for analysis.The company is published by Shenzhen small and medium-sized board(stock code: 002310) in November 2009. it’s the first garden Company, which published by Chinese A-shares. It’s also the most market capitalization landscape company in the world. By the end of April 2014,the Stock option incentive scheme of East Garden has already been implemented three times,and the mainly incentive object is the core staff, not only the company senior management, but also including the middle management of the company, and key technicist.Based on the analysis of some financial data, Beijing Orient Landscape after the implementation of stock option incentive scheme was implemented, there is a increase in company’s performance, especially in that year. Meanwhile company’s gross profit margin is increasing year by year. Compared with stock-index and shares of listed companies in the same industry, the Eastern garden stock in the secondary market gained significant excess returns, and provided investors a good investment opportunities.Since the stock option incentive scheme of Eastern Garden has been implemented, it would further improve the internal governance, innovation, and growth. To effectively guarantee the company’s competitiveness and performance, as well as the implementation of stock incentive scheme, the incentive scheme must be designed in accordance with their own needs, and a real shareholders in line with the interests of the professional managers, in addition, the constraint force and inspirit effect of incentive scheme must be equal.