Research On The Motivation And Effect Of Multi-level Equity Incentive

Since the China Securities Regulatory Commission issued the "Measures for the Administration of Equity Incentives for Listed Companies" in 2006,Chinese listed companies have begun to implement the equity incentive plan.Since the introduction of the “Guiding Opinions on the Implementation of Employee Shareholding Plan Pilots for Listed Companies”,the enthusiasm of listed companies to implement employee stock ownership plans has increased.After the opening of Chinese GEM on the Shenzhen Stock Exchange on October 23,2009,the enthusiasm for implementing the equity incentive plan and the employee stock ownership plan was higher than that of the main board listed company.At the end of 2017,a total of 773 listed companies in the A-share market announced and implemented equity incentive plans,651 announced and implemented employee stock ownership plans,and 186 companies simultaneously implemented equity incentives and employee stock ownership plans.Among the listed companies with parallel equity incentives and employee stock ownership plans,GEM companies accounted for 40% of the total,with 75 companies.Then,is there a commonality in the motivation of GEM listed companies to implement such a multi-level equity incentive plan? What is the impact of multi-level equity incentives on company performance? It is worthy of further study.This paper first reviews the literature on equity incentives and employee stock ownership plans through the literature research method.The main purpose of equity incentives is to restrict and motivate executives and core employees.The employee stock ownership plan focuses on It is a benefit sharing with ordinary employees.Both can play a role in improving the corporate governance structure,enhancing employee motivation and improving company performance.Then it analyzes the overall situation of multi-level equity incentives implemented by China’s GEM listed companies from three aspects: implementation year and quantity,industry distribution and geographical distribution.Secondly,this paper analyzes the case of Handex information from the specific examples,motivations and effects of multi-level equity incentives implemented by case enterprises through case analysis.The analysis shows whether the company chooses a multi-level equity incentive plan that is influenced by the company’s own and industry characteristics.The implementation of multi-level equity incentives has a positive effect on the company’s financial performance and market performance.Multi-level equity incentives have played a positive role in the company’s development.Based on the analysis of the motivations and effects of multi-level equity incentive schemes for case enterprises,this paper shows that in order to improve the effectiveness of multi-level equity incentive schemes and even equity incentive schemes,it is necessary to set reasonable and effective exercise conditions,appropriately extend the validity period,and expand Motivate objects and scope of grants and optimize corporate governance mechanisms.The conclusions of this paper provide reference for listed companies that have not implemented multi-level equity incentives,which is conducive to further improving the supervision and implementation of incentive systems.It also has certain enlightening significance for policy formulation and related legislation.