Incentive Fund Model Employee Ownership Stock Trust Plan Incentive Effect Analysis

The incentive of enterprise staff plays an extremely important role in the construction of contemporary enterprise system.It is beneficial to strengthen enterprise centripetal force,improve enterprise performance,improve company welfare system and stabilize and attract talents.In August 2012,China’s Securities Regulatory Commission officially issued the document "Interim Measures for the Management of Employee Stock Ownership Plans of Listed Companies",which means that the Employee Stock Ownership Plan will be fully implemented in China’s listed companies.Then in June2014,the Securities Regulatory Commission promulgated "Pilot Guidelines for the Implementation of Employee Stock Ownership Plans of Listed Companies",which is the first time put forward in Employee stock ownership plans are entrusted to organizations with asset management qualifications.The promulgation of this document has guiding significance for the adoption of ESOP trust plan by Listed Companies in China.Therefore,there is a wave of implementing ESOP trust plan in Listed Companies in China.At the same time,the flexible source of funds of ESOP trust plan gives listed companies many options in the source of funds,among which incentive fund is a relatively simple source of funds.In this context,it is very meaningful to study the adoption of ESOP trust plan by listed companies.Therefore,this paper uses case analysis method,based on the case of Hengtong Optoelectronics,to analyze the motivation and incentive effect of Hengtong Optoelectronics employing trust mode to implement ESOP.According to the analysis results,it summarizes the successful experience of ESOP and the existing problems in the implementation process.Finally,it puts forward relevant suggestions for the implementation of ESOP in Listed Companies in China.Through the research,it is found that: first,Hengtong Optoelectronics has a good incentive effect in implementing ESOP Trust Plan,which is a path that can be used for reference when choosing employee incentive scheme for listed companies in China.But at the same time,there are still some problems when Hengtong Optic-Electronics implements the ESOP Trust Plan,which are mainly manifested in five aspects: unstable calculation and withdrawal of incentive fund,small scope of incentive staff,lack of voting rights for employees,loose conditions for incentive fund calculation,thepossibility for senior managers to whitewash statements,high trusteeship costs and high implementation costs.Therefore,in view of the above problems,this paper puts forward four suggestions: utilizing the function of leverage financing of financial institutions,establishing a perfect performance appraisal system,improving the accounting system,and establishing institutions to implement voting rights on behalf of employees.