Stduy On The Effect Of Luolai Lifestyle’s Equity Incentive Of Market Reaction And Financial Performance

As a means of incentive,equity incentive started in America at the beginning of last century.In this way,the personal interests of employees are perfectly connected with the value of the company.On the one hand,employees are encouraged to promote the maximization of the value of the enterprise;on the other hand,employees also realize the accumulation of personal wealth,which rapidly becomes popular in other developed countries.Capital market in China started late,although equity incentive system in the 1990 s into the domestic,but that some immature capital market and enterprise managers understanding of equity incentive system is not comprehensive,equity incentive in our country enterprise to carry out the low frequency,more because of the lack of relevant rules and regulations of the standards,in the groping stage of equity incentive to little effect.However,with the continuous development of the capital market,China has officially issued a series of guidelines for the promotion and implementation of equity incentive after the reform of non-tradable shares began,so that the formulation of equity incentive scheme can be followed by the law.In the following ten years,China’s securities market has been developing rapidly,and the securities regulatory commission has issued various regulations on equity incentive,which has promoted the equity incentive in Chinese enterprises one after another.According to Wind database,from 38 in 2005 to 230 in 2015,the number of enterprises disclosed to implement the equity incentive plan in China has increased five times,and the implementation of equity incentive in China has reached a new level.The number of Chinese listed companies implementing the equity incentive system has been increasing year by year,indicating that Chinese enterprises have begun to pay attention to equity incentive,realizing that equity incentive is a way to promote enterprise development and motivate employees,laying a foundation for the long-term development of the company.But what about the effect of equity incentive plan? Although the previous scholars hold a consistent attitude of support for the implementation of equity incentive,but the effect and significance of the implementation of equity incentive are still in a controversial situation.The executive conditions of the equity incentive plan of some listed companies are set too high,and the equity incentive plan is doomed to fail.In some listed companies,the conditions of equity incentive exercise are set too low.As equity incentive is only a form,it fails to play its due role and even damages the rights and interests of minority shareholders.Therefore,how to set the equity incentive plan can play the best incentive effect has important significance.This paper aims to apply the equity incentive theory and,on the basis of individual case study,examine the implementation effect of equity incentive from two aspects.First of all,it analyzes the stock price effect after the implementation of equity incentive by the main company,in order to investigate whether equity incentive can have a positive stock price effect and whether it can bring stock price dividend to investors.Secondly,it evaluates the financial performance,analyzes the profitability,debt paying ability,development ability,operation ability and cash flow,evaluates whether equity incentive can have positive effects on financial performance and enterprise’s comprehensive ability.Finally,based on the evaluation of the implementation effect,it analyzes the advantages and possible problems in the equity incentive plan of Luolai lifestyle,and puts forward relevant suggestions for improvement and improvement for reference,in the hope of enriching the study of equity incentive cases and promoting the improvement of equity incentive theories.