Implementationeffect Of ZTE's Equity Incentive Plan

Equity incentive is essentially a long-term incentive mechanism that companies implement to motivate and retain core talent in the enterprise.This kind of long-term incentive mechanism adopts the method of conditionally giving the operator part of the shareholders' rights,making the operator become the incentive object and transforming it into the owner,and standing in the same interest direction with the enterprise to form the interest community.Then participate in the company's management decision-making as the owner of the company,and share the interests and risks with the company,urge the operators to work harder in order to improve the performance of the company,further realize the long-term development goals of the company and maximize the equity wealth.Under the background of the rapid development of China's market economy,the market environment is becoming more and more standardized,laws and regulations are becoming more and more perfect,equity incentive can be successfully implemented in Chinese enterprises.This has also attracted more and more listed companies to make bold attempts to implement the equity incentive plan.However,the development time of China's equity incentives is not long,the relevant systems are not perfect,the legal environment needs to be improved,many enterprises' operating performance has not achieved the desired results after the implementation of equity incentive,or even become self-defeating.Some companies do not know how to plan specific incentives,what incentive models,stock sources and incentive ratios are used,so that the implementation of equity incentives is not satisfactory.At present,the research on equity incentive system in domestic academic circles mostly uses the large sample data of listed companies in China as the basis for analysis.These studies provide a more general solution for the application of equity incentive in listed companies in China and can solve some common problems.On the basis of the achievements of the previous empirical research institutes,this paper selects specific cases to carry out specific analysis and draws relevant conclusions to provide solutions for similar problems.After comprehensive consideration,this paper finally decided to select ZTE as the case company to study.According to the operating principle of equity incentive,combined with relevant theoretical foundations,select representative financial indicators to establish corporate performance evaluation criteria.The paper compares the effects of ZTE's equity incentives on profitability,operational capability,solvency and development capability.In addition,this paper also uses the event research method to analyze the market reaction of ZTE's implementation of equity incentives,the market reaction is measured by calculating the cumulative excess return CAR with the stock price effect as the evaluation index.Through comprehensive evaluation of the implementation effect of the equity incentive plan,it summarizes the advantages and disadvantages of ZTE's equity incentive plan,draws the final conclusion,proposes improvement suggestions,hoping to give some inspiration to other listed companies intending to implement equity incentive scheme,and help these enterprises formulate equity incentive scheme more scientifically and effectively and promote enterprise development.