Analysis Of Supor’s Equity Incentive Scheme

Equity incentive system is the result of solving the agency problem.As a means to improve the corporate governance structure,equity incentive contributes to enhancing the value of company and retaining key talent for the company.It provides the driving force for the development of companies,so are widely used by lots of companies.Based on the three sets of equity incentive schemes,which are implemented by the private family listed companies and the foreign equity holding enterprises,this paper summarizes the design characteristics of Supor’s equity incentive system,and compares the motivations of the two-stage equity incentive,then evaluates its incentive effects.Finally,make recommendations to the listed companies to design equity incentive system.Literature research method,individual cases analysis method and event study are adopted in this whole paper.Firstly,combining with the background of the acquisition of the company and the frequent loss of senior management talent,comparing the evolution characteristics of the elements of the Super’s equity incentive in different stages.It is found that the range of incentives is expanding,and the contract model is changing from stock option into restricted stock,and conditions of executive are more realistic and diversified,and the incentive period becomes longer.Then,according to the characteristics of the contract elements and the research of previous literature,it is concluded that the change of the nature of the equity result the difference of the equity incentive motive.After purchased by SEB,the level of governance has improved,and effectively achieve divorce of management from ownership.The scope of equity incentive is widening and inspiring strength is increasing.Compared to the private family business stage,foreign investment holdings the main purpose is to stabilize the management team not to seek benefits for themselves.Then Combing the implementation of the previous equity incentive,evaluate its incentive effect from market reaction,exercise results and performance.Before purchased,Supor exercises all the options after the first exercise period so that get high profits for a short time.Although the company’s performance has a certain boost,the duration is short and the market reaction is not active.We do not rule out the suspects of management of earnings.After purchased by SEB,The incentive program is awarded a price of $0.The extension of the unlock period allows the incentive object to earn bonus points in batches,which has made a significant contribution to the stability of the company’s management team.Company performance is good,and excess cumulative yield growths significantly.Finally,based on the dynamic equilibrium concept,it is suggested that listed companies should consider the motivations of the actual situation of the company before designing equity incentive system,and set the key contract elements,and act synergistically corporate governance and other management systems.The contribution of the paper is to provide evidence and theoretical reference for the different performance of the design and implementation of the equity incentive system based on the conversion of the equity nature which is from private family enterprises to foreign holding companies.Case analysis shows that private enterprises are faced general difficulties and problems before and after the acquisition by foreign companies to a certain extent.The level of corporate governance of private family enterprises is relatively weak,and the phenomenon of talent loss after the acquisition of foreign enterprises is serious.In terms of innovation,based on the dynamic equilibrium concept,We think equity incentive system as a constantly changing and balanced management process,the formulation of each set of equity incentive programs need to be based on the company’s environment and the development stage to determine the proper motivation.Setting up the contract elements scientifically,so as to build a binding and incentive contract framework,and play a synergistic role in corporate governance and other management systems.