Design Of The New Century Supermarket Management Equity Incentive Plan

With the trend of economic globalization and the growing number ofinternational economic competition, companies are facing a deteriorating economicenvironment. This is a major challenge to Chinese enterprises will face. Most of thecompany’s future earnings, must rely on human capital. All this requires companies topay attention to human resources and build a sound and reasonable internal incentivesystem. Among them, the most important equity incentive is a solution. For listedcompanies, the application of the equity incentive system is relatively common, butfor non-listed companies, especially those of non-listed private enterprises in terms ofthe applicability of the equity incentive ways and there are still many difficultproblems.Essence of the modern enterprise system in the separation of ownership andmanagement, leading to a "principal-agent relationship" problem. Agency theory isthat the operator’s remuneration and performance together, helps operators to takeoptimal behavior. The fact of the existence of information asymmetry betweenmanagers and owners, operators increased use of information advantages of adverseselection and moral hazard, so the owner of the agency cost increases. Meanwhile, theoperators as the highest level of human capital business, claims the benefit of certainresidual claims and control. Business owners must design an effective incentivemechanism, the interests and the interests of the individual owner operators workclosely together, the only way to maximize the interests of shareholders, to reduceagency costs and risks; at the same time, through strict contract relationships andeffective supervision to restrict the behavior of executives to ensure that corporateexecutives as possible in accordance with the will of the owner’s action. Operator’sjob performance directly affects the overall management and operational efficiency.Therefore, the "how to motivate executives, executives full potential, making forbusinesses and shareholders to create the greatest economic value", has become a key issue of business management.The original part of the new century supermarket FAW Group IndustrialCorporation, is a state-owned large retail supermarkets, by institutional constraints,was hovering at the edge of life and death. January1,2009, the supermarketcompleted corporate restructuring, the board of directors to invest20.9million yuanafter the reform of the new century, the supermarket has been upgrading. Thecompany was first established, the frequent high-level flow, With the constantdevelopment and expansion, corporate dominance gradually exposing employeesworking mentality and corporate governance characterized by serious shortcomingsof typical private enterprises. To motivate and retain executives and the company’score business backbone, only through pay and other measures are sometimesinadequate, timely implementation of equity incentive plan, in addition to motivatingemployees, but also to improve the company’s ownership structure.This paper emphasizes the importance of human resources strategy to guide thenecessity of building construction enterprises equity incentive system. For equityincentive problems, the introduction of case analysis and document analysis,comparative analysis of the existing business plan "salary system" and Solutions"stock options" system’s strengths and weaknesses, pointed out the non-listedcompany equity incentive feasible new century supermarket sex, and to take therelevant type of incentive stock options. According to the needs analysis, in the thirdchapter author, the specific situation of the new century supermarket designed virtualshares and deferred compensation plan as the main feature of the specific operation ofthe program, indicating that the managerial ownership incentives in non-listed privateenterprises may be practiced. Since the program has not been implemented, theimplementation cannot determine the effect of the fourth chapter proposed a series ofsafeguards and designed with the company’s existing remuneration system of theconvergence program, for ensuring the smooth implementation of equity incentiveprograms.