Research On The Equity Incentive Of High Tech Enterprises

In the Fifth Plenary Session of the Eighteenth Central Committee,Chairman Xi pointed out that adhering to innovative development and putting innovation in the core position of the country’s strategic development.He also demonstrated that we need to promote the heretical innovation,system innovation,technological innovation,cultural innovation and other aspects continuously to make innovation embedded in all the work in party and country,and to make it become a common practice throughout the whole society.As an important part in technological innovation field,the high-tech industry has the essential difference with the traditional industry.As we all known,technological innovation is the core competence for high-tech enterprises.It means that those enterprises can not survive in modern society without innovation.One of the most important driving factor of innovation is human resource which determines the organization’s speed and width of growth.According to some incomplete statistics,the technical staff accounts for more than one third in those enterprises.But now many enterprises are facing talents loss,ineffective management and unreasonable incentive mechanism.Therefore,building an effective incentive mechanism to motivate technologists is extremely important for high-tech companies.In recent years,equity incentive has been gradually introduced in corporate governance and widely accepted by managers.The first part of this paper elaborates the theory of equity incentive and analyzes the motivations of adopting equity incentive by managers.And using descriptive statistics method to reveal the present situation and characteristics.The second part of this paper analyzes the case of Zhongheng Electric Company.Based on this case,this paper discusses the micro environment of equity incentive,analyzes the incentive process and the final implementation from financial and non-financial aspects.In one hand,comparing the profit change to explain the approach’s impact on the company.In the other hand,comparing the change on innovative ability of employees and enterprise.The two aspects contributes to the final conclusion.Finally,this paper lists some recommendations which may help employees and enterprises achieve interest congruence and promoting the enterprises’ growth.