Research On The Performance Of Equity Incentive Implementation

With the continuous development and gradual improvement of China’s equity incentive system,more and more high-tech enterprises are implementing equity incentive plans,aiming to optimize the corporate governance structure,enhance the stickiness of the company’s core talents,and attract foreign excellent talents.The joining of excellent talents will further improve the core competitiveness of the enterprise and achieve the improvement of enterprise performance.Hightech enterprises have shown great potential in the process of exploring equity incentives,but there are also many problems.As a private hightech enterprise,Zhongheng Electric has launched three equity incentive plans since its listing in 2010.The first two equity incentive plans have been successfully implemented and achieved good results.The third equity incentive plan is being implemented.This article takes Zhongheng Electric as the case study object,adopts a combination of case and theory,and analyzes the motivations and element design of the equity incentive schemes on the basis of sorting out domestic and foreign literature and theories related to equity incentives.And then evaluated the implementation performance of Zhongheng Electric’s equity incentive from three perspectives of market response,financial performance and innovation performance.Finally summed up its successful experience and deficiencies,and gave suggestions relatively.The results of the study found that the three equity incentives of Zhongheng Electric are mainly based on core technology(business)personnel and take into account the equity incentives of senior executives.Their first equity incentive plan is welfare,the second equity incentive is incentive,and the third incentives are both welfare and incentive.In terms of implementation performance,the market responses of the three equity incentives of Zhongheng Electric are different.The first shows a short-term positive effect,but it finally returns to zero;The second market response is a positive effect,but the third market response is negative.Effect;The implementation of equity incentives encourages company executives to increase innovation investment,helps companies successfully attract and retain R&D technical talent,effectively mobilizes the enthusiasm of employees,improves innovation efficiency,and increases innovation output.The incentive effect on innovation performance also shows a 1-2 years continuous incentive effect after the implementation is completed.In addition,compared with the first equity incentive,the second equity incentive has more obvious improvement in innovation performance.Equity incentives encourage company executives to improve the efficiency of operation and management,and at the same time rationally use financial leverage to enhance the profitability of the company,which is beneficial to the company Long-term development.But the impact of equity incentives on Zhongheng Electric’s financial performance is limited to the current period of implementation.Overall,Zhongheng Electric ’s equity incentives have achieved good results.The success of Zhongheng Electric’s equity incentive plan lies in the appropriate incentive model it choosen,the reasonable source of stocks used for incentives,the appropriate scope of incentive targets,and the normalization of equity incentives.However,there are also problems such as low setting of exercise conditions,single performance evaluation indicators of the company,unclear operating standards for personal performance evaluation,and a short validity period of equity incentives.Therefore,this article suggests that enterprises should choose a proper equity incentive model,set scientific and reasonable assessment indicators,and appropriately extend the validity period of equity incentives to ensure the smooth implementation of equity incentives and achieve good and long-term incentive effects.