Research On Shanghai Jiahua Equity Incentive Optimization

Equity incentives,also known as option incentives,are an incentive system for companies to retain and attract talent.This incentive system is very common in China.With the development and continuous improvement of the society.the company's initial mode of direct management decision-making by the owner has gradually been eliminated by the society.Instead,the owner hires a professional manager to manage the company.Although the benefits of implementing this method are many,the problems have followed.Some managers,in order to obtain their own interests,disregard the long-term stable development of the company and damage the interests of the company and shareholders through some means.This kind of problem has also become one of the most headaches of Shanghai Jahwa and needs to be resolved immediately.The turnover rate of Shanghai Jahwa management personnel and core backbones is getting higher and higher,which makes the actual situation of the company unable to show up in time.For this reason,the company owner should establish an effective and practical equity incentive plan based on the actual situation of the company.Let managers and company owners stand in the same camp,make more scientific management decisions,improve business results,and work together for the company's long-term stable development.This paper adopts three methods:literature research,case study and comparative analysis.The case selected in this paper is the four equity incentive plan implemented by Shanghai Jahwa.By comparing the design of four equity incentive plans in 2008.2012.2015 and 2018,the results are evaluated by financial indicators and market response.In 2011.Shanghai Jahwa completed the transformation from state-owned enterprises to private enterprises.Before the reform,most of the motivators were core core members,and the exercise conditions were relatively low.After unlocking,they gained a lot.but after implementation.The stock price is even lower than before the implementation.Since the transformation into a private enterprise,the equity incentive plan formulated in each aspect is more complete and scientific than before the reform,but the market response is not large,and the effect of equity incentives is limited.From this point of view,equity incentives need to have several conditions for smooth implementation.First,we must not blindly emulate other enterprises.We must set a reasonable exercise condition based on the actual situation of the enterprise and use it as a starting point.Low.incentives are also the same,to be moderate.Secondly,internal supervision should be strengthened to provide a good governance environment to ensure the effective implementation of equity incentives.Although Shanghai Jahwa is an individual case,it can give other companies some experience and reference.