Analysis Of The Equity Incentive Effectiveness Of Listed Companies—Taking M Company As An Example

With the continuous development of the society and economy,the scale of the company has continued to expand,and the form of the business sea has changed rapidly.Many companies are not satisfied with the traditional model of direct management of shareholders,and thus there has emerged a commissioned agency model.The shareholder status remains unchanged,but professional people will be invited to run the company and make suggestions for the company's longer-term development.After this model emerged,outstanding managers emerged.However,the managers are only the managers of the company and their positions are inconsistent.The roles and positions are inconsistent.From another perspective,the two are not the interests of the public,and some places will directly generate disagreements.Equity incentives are an effective way to solve the principal-agent problems.Through equity incentives,the two become interest communities,reduce agency costs,and achieve a win-win situation.In recent years,China's enterprises have extensively used equity incentives in solving principal-agent problems.However,due to the different nature of the industry,different stages of the company's activities,and the implementation of incentive programs are also different,and there are countless cases of failure.In general,there are not a few companies that have implemented equity incentives in China,and most of them have failed.At the same time,China's capital market started late and is still in the development stage,and it is not mature enough.M company is the leader in the home appliance industry and has implemented a four-stage equity incentive plan,which has achieved great success.For the home appliance industry and other industries have set a good example.This article adopts a combination of theory and case studies to deeply explore the company's equity incentive plan,and sums up the relevant points,which has a certain role in promoting their own equity incentive programs.This article uses the method of case analysis,first states related theories,then analyzes the case of M company equity incentives,finds out its problems and solutions to the problems.This article is based on the theory of principal-agent theory,human capital theory,two-factor theory and so on.Then it elaborates the equity incentive.The article begins with a description of the research background and significance,domestic and foreign research status,and briefly introduces the domestic and international situation and the development history of equity incentives at home and abroad,as well as the types and elements of equity incentives.The following cases were introduced and divided into three parts.The first part briefly introduced the case and the incentives for implementing equity incentives,and then performed a longitudinal analysis of its implementation effects to measure the impact of equity incentives on the company's solvency,profitability,and operational capabilities.Use this company to make horizontal comparisons with other companies that have implemented equity incentives and summarize the successes of the cases.Then consider the market reaction and employee turnover of M company when implementing the equity incentive plan.Finally,combining the previous analysis with the following comparisons,we have come up with rationalized suggestions—to improve the company's compensation system and internal governance,to set up equity incentive plans scientifically,and to improve the external environment.