Case Study On The Implementation Effect Of Huayu Software Equity Incentive

Equity incentive belongs to the category of option incentive,which is a long-term incentive mechanism for the company to motivate and retain core talents.Since China introduced the equity incentive system in the 1990 s,with the increasingly perfect economic and legal environment for implementing equity incentive,listed companies have launched equity incentive schemes in recent years.As a product of the information age,information technology enterprises have the characteristics of rapid update and higher requirements for innovation compared with traditional industries.Therefore,equity incentive is increasingly common in the information technology industry.Therefore,the financial impact and incentive effect of the implementation of equity incentive on listed companies have become a hot issue in the current theoretical research.This thesis takes Huayu software co,LTD.(hereinafter referred to as "Huayu software"),a well-known enterprise in the information technology industry,as the research object.Thesis in the core competitive advantage based on the state industry increasingly,technology-oriented enterprises becomes increasingly important,on the basis of selecting representative parts of the industry as the research object,use of the method of case study,analysis of Huayu software equity incentive effect,to provide information technology or information technology industry,effective experience or methods can be drawn lessons from.On the basis of combing relevant research results at home and abroad,this thesis introduces and analyzes the following parts of Huayu software's equity incentive plan.Firstly,this thesis reviews the implementation process of the equity incentive plan of China's information technology enterprise Huayu software in 2012 and 2015,and analyzes the implementation background,motivation and content of the equity incentive plan.Secondly,the event study method is used to study the short-term market reaction of the market to the announcement of the incentive draft,and the change of the company's financial performance after the equity incentive is comprehensively investigated through the financial indicators.Then,from the perspective of quantitative analysis of the management fee and sales rate changes of the two financial indicators,from the perspective of qualitative investigation investment condition,dividend distribution situation,the specific changes of management ownership,equity incentive can find Huayu software helps to unify the management and the long-term interests of the enterprise,thus reduce agency cost.Finally,the modified Jones model and regression analysis are used to process and analyze the changes of earnings management degree of Huayu software before and after the implementation of equity incentive plan.Through the regression analysis of quarterly data and annual data,and the comparison with the announcement and implementation time of the equity incentive plan,it is concluded that the reasons for the change of earnings management direction and degree are greatly related to the equity incentive plan.Through the study of Huayu software's equity incentive scheme,it can be found that the implementation of Huayu software's equity incentive plays a positive role in improving enterprise performance,stabilizing enterprise talents,reducing agency costs and other aspects,but may also induce earnings management.Therefore,when designing the equity incentive plan,enterprises should also pay attention to the setting of equity incentive elements,set the incentive elements reasonably according to the company's own situation,and give full play to the positive role of equity incentive.