Research On The Effect Of The Implementation Of Equity Incentive In SQ Food Co.,Ltd

With the continuous development of the market economy,enterprises have gradually shifted their management focus to the cultivation and motivation of core talents.As the company's management system is gradually improved,the management rights are separated from the ownership,and there is a conflict of interest between the owner and the manager under certain circumstances.Managers are likely to make decisions that harm the overall interests of the company in order to obtain more of their own interests.Therefore,in order to better avoid managers' behaviors that are not conducive to the development of the company,many companies have begun to adopt equity incentives.By attaching certain shares to the motivated people,their personal interests are closely related to the company's interests.This measure can effectively prevent the operators from doing harm to the company's interests and better protect the interests of shareholders.The company has developed stably for a long time and maintained its leading position in the same industry.The equity incentive system began to appear in the 1950 s,but China began to implement equity incentives in the 1990 s.Compared with other foreign countries,the equity incentive system started relatively late in China,but its development speed in China is extremely alarming.Since China promulgated and strictly implemented the rules and regulations on equity incentives in 2006,equity incentives have become very popular among Chinese companies,and more and more companies have begun to implement equity incentives.As of 2017,there have been 1,154 companies in China that have implemented equity incentive plans.The company's equity incentives have solved the shortcomings of separation of management rights and ownership to a certain extent.This paper adopts literature research method,single case analysis method and comparative analysis method to analyze more deeply whether the implementation of equity incentive will have a positive or negative impact on the company's development.Taking SQ Food as the research object,through the specific analysis of the implementation of the two-phase equity incentives for SQ Food,it is further judged how effective the implementation of the equity incentive method is.According to the company's own development needs,SQ Food implemented the stock option incentive plan and the restricted stock incentive plan in 2014 and 2016 respectively.For the two-phase equity incentives implemented by the company,this paper analyzes the implementation effects of equity incentives one by one from three aspects: financial performance,non-financial performance and market response.The research results show that in terms of financial performance,the implementation of equity incentives has a significant effect on the company's operational capabilities and profitability,which has improved the company's development capabilities to acertain extent.In terms of non-financial performance,the loyalty of the company's executives and core talents and the overall quality of the employees have been greatly improved,and the company's R&D and innovation capabilities are further enhanced.In terms of market reaction,the stock price is rising steadily in the short term.However,in terms of long-term time,the stock price changes are not optimistic,and the overall situation is in a state of volatility,indicating that equity incentives have played a positive role in the short-term market reaction,while the long-term market response has not played a long-term role in improving the company's stock price.In addition,the equity incentive model of SQ Food is constantly improving,and the intensity of incentives is gradually increasing.There are also some shortcomings in the equity incentive plan,such as unreasonable set of exercise conditions and imperfect performance appraisal system.These problems will reduce the enthusiasm of the incentive targets to a certain extent,which will adversely affect the implementation effect.Finally,this paper makes an in-depth analysis of the problems existing in the implementation process of equity incentives,and proposes targeted optimization suggestions.It is expected to solve the shortcomings in the implementation process of equity incentives and provide some experience for other companies that implement equity incentives.