The Discussion Of ESOP Issues In HW Company

ESOP originated in the United States capitalist and attorney Louis Kelso's two-factor economic theory,which is a process by employees who hold stocks or options to get excited and make long-term performance incentive plan.ESOP has been used widely in Western business community in the 1970 s and 1980 s,has been the rapid development.Theoretical and practitioners has gradually focus on ESOP in our country recent years,it is considered a good way to solve the incentive problem.On the whole,the implementation of ESOP majority in the exploratory stage and have many problems,such as the lack of appropriate supporting systems,copy mode,and subsequent lack of incentives.This shows that Chinese enterprises should not simply apply the western mode.This is decided by the different of Chinese and Western cultural traditions and social systems.Through literature review of ESOP,we can found that,compared to the theoretical and empirical research in foreign scholars,the research of domestic scholars is the comparison of ESOP and body-share-system.It is a form of labor organization created by Jin-merchants in long-term business activities,requiring employees with their own morality,ability,diligence,and achievements through assessment,and then obtain a certain number of shares,participate in dividend.This system is similar to ESOP.This provides a good idea to explore suitable for China's national conditions Chinese characteristics ESOP,that draw on the excellent traditional culture of our country on the basis of experience combined with advanced Western theories.This provides a good idea to explore suitable way of Chinese characteristics ESOP,which draw on the excellent traditional culture of our country and combined with advanced Western theories.HW selected as a case study in this paper has a certain representation,reality and fit.(1)HW is a private technology enterprise in China,and now the world's top 500 and one of the best Chinese enterprises.The decades extraordinary development of HW due to its powerful incentive mode,and the ESOP is the core part of the incentive mode.ESOP is not only to solve the financing problem,agency costs,but also retain high-tech talent and inspire enthusiasm;(2)The implementation of ESOP in HW has entered a turning point,insufficient follow-up incentive,share purchase funds drying up,the operation is not standardized,so that HW is facing new challenges;(3)HW's ESOP is unlisted,which is different from many Western companies,can better able to fit the traditional culture of the body-share-system.Therefore,this paper get a new idea from the literature review,with China's unique body-share-system as a successful experience for reference,hoping to learn from the reasonable portions of the body-share-system,then combined with the analysis of various aspects of HW and advanced western theory,offering the suggestions of the problems in the implementation of the ESOP.This paper is divided into six chapters: The first part is preface,including the background and significance of the research,literature review,the clues and methods of research,construction of the overall framework of the article discusses.The second part is an overview of the theory about ESOP,firstly,introduced the concept of ESOP,analyze its motivation and summarize its characteristics through literature review;secondly,introduce typical various domestic and international basic mode;finally,introduce the basis theory of ESOP,make a foundation of the analysis of this article.The third part is the implementation process and effects of the ESOP in HW,including applicability analysis,development,implementation details and effects analysis.The fourth part is through the depth of analysis of the third part of ESOP in HW and found the problems in the implementation process.The fifth part introduce the outstanding body-share-system and summarize its successful experience.The sixth part introduce the reasonable portions of body-share-system,and give the operational recommendations of the problems in the implementation process of ESOP in HW.Although the social system of the Ming and Qing Dynasties are very different with our current social system,learn from the reasonable portions of the body-share-system,such as “Confucian culture”,institutional culture,etc.and continuously modifying under the current environment,can rich the connotation of Chinese ESOP,promote the development of enterprises.This paper based on the behalf of companies--HW,combined the body-share-system with ESOP,on the one hand,to provide the experience of ESOP for our business practices,which has important practical significance;on the other hand,can provide a new direction for the study of future scholars.