Study On The Problems Of FUANNA's Equity Incentive

After more than 50 years of practice,the equity incentive has become more and more mature in western country,participated in corporate governance as an important incentive mechanism.It is just 20 years for our introduction to equity incentive,but equity incentive has been accepted by many enterprises.From 2005 when China government started Equity Division Reform,government has issued many normative documents about equity incentive,which created a benign legal and policy environment and eliminated legal obstacle for enterprises,therefore more and more enterprise carry out equity incentive.But in general,because of capital market imperfections and poor governance environment,unreasonable equity incentive contract,equity incentive of many enterprise has not had expected effect.In this paper,with the method of literature research and combining case research,the author select FUANNA as object of study,analyze and compare performance of FUANNA after and before the implementation of equity incentive,carry out event study method to evaluate capital market reaction,analyze turnovers of top manager and common staff,and then evaluate specific effect of equity incentive plan.The results show that equity incentive plan did not play due role in retaining talent and market reaction.Subsequently,the author adopt evaluation system to evaluate the design of FUANNA equity incentive contract.There are some problems in duration arrangement,person incentive intensity,selection of incentive object,the design of vesting and unlock condition and therefore there are room for improvement.Based on this,this paper redesigns FUANNA equity incentive contract,from ways of the incentive model incentive object,grant price,arrangement of amount,duration arrangement,vesting and unlock condition,etc.These suggestions could also be used in other companies.