Case Study On Equity Incentive Of MeixinYishen

In 1950 s,equity incentive emerged in America and then spread in Europe and Asia.As a long-term Incentive system,the function of equity incentive that solves the problem of enterprise principal-agent was confirmed constantly.Along with “listed companies equity incentive management approach(Trial)” issued at the end of 2005,equity incentive approached in china formally.After more than 10 years of development,equity incentive has been sophisticated in mainboard and start-up board.However,as a new capital market in China,equity incentive on NEEQ was still in the initial stage of development.Until 2014,NEEQ listed companies have begun to operate equity incentive.With the vigorous development of the NEEQ market,more and more NEEQ listed companies carried out equity incentive.But the legal provisions for the equity incentive on NEEQ are very scarce at present.In this case,it increases the operating space and brings all sorts of malpractices.Researches on the design of scheme and effects of implementation are of great significance to case company and the other NEEQ listed companies which want to carry out equity incentive.Three kinds of research methods are used in this paper: literature review,case study and comparative analysis.Through literature review,the author summaries a large number of documents in the field of equity incentive,making the follow-up research have a profound theoretical basis.Then the equity incentive system and theoretical basis are outlined.The case section begins with the third chapter,this paper selects a representative company-Meixin Yishen as a case.First of all,the motivation and feasibility of implementing equity incentive are analyzed combined with company's situation,and the contents and implementation process of the incentive plan are briefly introduced.Then the incentive effect is analyzed from three aspects: company's financial performance,key employee turnover rate and innovation ability.Finally,starting from seven elements,this paper makes a detailed analysis of the equity incentive scheme of Meixin Yishen,and puts forward the optimization suggestions in view of the shortcomings of the scheme design.The study found that,after the implementation of equity incentive,Meixin Yishen's profitability,growth and innovation ability have been improved significantly,and played a role in stabilizing the core staff,but it has little help to the solvency.After a detailed analysis of the equity incentive scheme of Meixin Yishen,it is found that the scheme is reasonable as a whole.However,the selection of incentive objects and the allocation of incentive stock need to be discussed,and there is a single performance appraisal index and lack of individual performance assessment in the setting of performance assessment.The suggestions for the above problems are as follows: Not identifying the supervisors as incentive objects,and compensate them by salary or bonus;allocate more incentive stocks to the core technology talents and business backbone,and reduce the incentive stocks for the board members;Increase industry comparison index and non-financial index,and increase the index of individual performance assessment.Through an omni-directional study of the case,I hope that can provide some experience for Meixin Yishen and other NEEQ listed companies who are interested in equity incentive.