The Research On Implementation And Evaluationof Equity Incentives In Unlisted Company

The development and improvement of the modern company institution led to that most firms will face the situation of separation of ownership and operation right,and seeking different goals.Thus,how to attract and keep talents to make contribution to company while get their advantage at the same time becomes the main issue of the industry.In order to encourage and restrict the behaviour of the operator effectively,equity incentives which can replace the traditional cash-based payment model is gradual introduced and promoted.In terms of listed companies,the share price is a relatively reliable standard to measure the performance of the company.And in our country,government has already provided regulations to establish and improve the equity incentivess and restraint mechanisms of the listed companies.However,there is no uniform regulation to adjust the equity incentives of unlisted companies,and this left,a huge space for their equity incentives plan and incentive tools.Therefore,compare with the listed companies,unlisted companies have more incentive tools which make them more flexible.So one of advantages of unlisted companies is that they can be targeted to design various incentive plans depend on specific circumstances.An important difference between listed company and unlisted company is that as a public company,the equity transaction of listed company is open,and listed company's shares can be transferred in the secondary market,while unlisted company is short of normal equity market as a trading place.In recent years,along with the improvement of the domestic property exchange system,the gradually maturity of the external conditions is becoming better,so more companies are preparing to carry out the equity incentives.This essay described how to operate the equity incentives effectively among unlisted companies based on principal-agency theory and incentive theory and the developing of equity incentives in domestic companies,especially in unlisted companies.Moreover,it will discuss the practical application and possible problems according to a case study of an unlisted company's equity incentives plan.Furthermore,the author concluded a number of equity incentives features during the implementation process,the difference between listed companies and the method to improve the equity incentives of unlisted companies from the micro and macro perspectives based on the case,which provide some reference for similar firms to develop and implement equity incentives of their own.