Study On The Equity Incentive Effect Of Shanghai Jiahua

In modern corporate governance,the principal-agent contradiction between the owner and the operator is constantly prominent.A good equity incentive system can bind the interests of the owner and the operator together,forming a long-term mechanism of revenue sharing and risk sharing.With the completion of the reform of non tradable shares and the introduction of relevant policies,more and more companies begin to try equity incentive.However,many companies fail to achieve the expected effect of equity incentive due to various reasons in practice.Shanghai Jiahua is one of the leading enterprises of daily chemical industry in China.Facing the increasingly fierce competition,the company continues to launch equity incentive plans.Whether equity incentive can improve the company’s operating conditions,and how to make equity incentive play its due role are of great significance to the long-term development of the company.This paper takes Shanghai Jiahua as the case study object.Firstly,it analyzes the mechanism of equity incentive based on the relevant research of equity incentive at home and abroad.Secondly,it studies the scheme design and implementation motivation of the previous equity incentive in Shanghai Jiahua.Secondly,it makes a comparative analysis of the changes of relevant aspects of the company before and after the implementation of the previous equity incentive in Shanghai Jiahua,and studies the equity incentive to The effect of Shanghai domestication.At last,the paper summarizes the existing problems in the equity incentive of Shanghai Jiahua and points out some suggestions for improvement.Through the research,we find that the first two equity incentives of Shanghai Jiahua have a certain promotion effect on the company,especially the second equity incentive has a significant effect.However,the third equity incentive was not successfully unlocked due to the failure of performance evaluation,and after the implementation of equity incentive,the company’s financial indicators showed a downward trend,the principal-agent cost and the turnover rate of the incentive object increased,the overall quality of employees and the ability of R & Dinnovation decreased,and this equity incentive did not bring the expected effect.Through the research,it is found that the first equity incentive of Shanghai Jiahua has the problem that the equity incentive is controlled by the management,and the third equity incentive has the problem of insufficient incentive strength,and the previous equity incentive has the problem that the assessment index is relatively single,which also affects the effect of equity incentive.This paper makes a comprehensive study on the effect of previous equity incentive in Shanghai Jiahua,summarizes the reference and existing problems of equity incentive,and puts forward suggestions for improvement,hoping to provide some reference for the future equity incentive in Shanghai Jiahua,as well as for other companies implementing equity incentive.