Research On The Optimization Of Equity Incentives Of K Co., Ltd

The model of equity incentive in modern companies comes from the problem of principal-agent which rises from the separation of ownership and management.The basic idea is to apply executives stock option,forming the interest risk community of executives and the owner,so that the incentive object can serve the long-term development of the enterprise.Finally,the value of the present enterprise is unified with the individual value.According to statistics,as the birthplace of equity incentive,65%of the average salary of the top executives in the listed companies comes from the equity incentive compensation linked to the long-term performance,and the mature equity incentive model in developed countries provides a theoretical and practical reference for the establishment and improvement of China's equity incentive mechanism.At the end of 2005,China Securities Regulatory Commission issued"Listed Companies Incentive Management Approach"(Trial).The listed companies began to implement a wide range of equity incentive plans.With the gradual improvement of relevant laws and regulations,equity incentive has been perfected in practice,and the effectiveness of incentive is continuously improved,and the concept of equity incentive has become deeply rooted in the hearts of the people,becoming the effective means to solve the principal-agent problem and smooth the multi-party conflict of interest.But at the same time,there are also some serious deviations from the nature of incentives,such as"financial data whitewashing,equity incentives popularization,evaluation indicators welfare"and so on.By introducing the current research status of equity incentives at home and abroad and the basic principles of equity incentive,this article use the current mode of K Limited by Share Ltd as a breakthrough point,to put forward problems,analyze problems,and finally find solutions.This paper first introduces the content of K stock incentive scheme and its implementation,the reason why K company is chosen as the object of study is inseparable from the representativeness of its industry and the uniqueness of its equity incentive mode;Secondly,the multi-dimensional analysis of the effect of K company incentive plan,including investment and financing behavior,development ability,operation situation,market performance and talent mobility,etc.At the same time,the paper analyzes the main problems of the scheme from two aspects:the performance evaluation index and the establishment of right conditions,such as the single evaluation index and the lack of rationality,the simple and lack of flexibility of the exercise elements,etc;third,by grasping some key elements such as the incentive model,the incentive object,the incentive quantity,the right price,the performance evaluation index and taking full account of the design objectives,design principles and the optimization necessity of K company's equity incentive scheme,introducing the economic profit method(EVA),personal job evaluation system,stock option indexed pricing model and other scientific methods,this article further proposes the optimization design scheme of equity incentive.Finally,this article summarizes some enlightenment of the case on the improvement of equity incentive mechanism for listed companies in China.