Research On The Design And Implementation Effect Of Restricted Stock Incentive Scheme

As a long-term incentive mechanism,equity incentive is an important means to reduce agency costs and increase corporate value,but its implementation effect has always been a controversial topic.The reform of non-tradable shares has solved the major institutional defects restricting the development of China’s capital market,and the equity incentive system has also entered the development stage from the exploratory stage.With the continuous improvement of relevant policies,equity incentives have been adopted by more and more Chinese listed companies.However,design factors such as the unreasonable selection of incentive models and objects,and the excessively loose setting of incentive periods and evaluation indicators still affect the implementation effect of equity incentives.Therefore,how to design each element of the equity incentive plan so that it can truly stimulate the effect is of great significance to the development of equity incentives and the enhancement of corporate value.This article reviews the relevant literature on restricted stocks at home and abroad,combined with principal-agent theory,incentive theory and human capital theory,to make a theoretical analysis of the element design and implementation effects of restricted stocks.On this basis,with Lianhua Technology as the research object,it analyzes the rationality of the design of its 2017 restricted stock incentive plan model selection,stock source,grant object,grant quantity,grant price,and unlock conditions.Then analyze the implementation effect of the restricted stock incentive plan from three aspects: financial performance,market response and human capital.Then compare this incentive plan with the 2011 stock option plan and the2014 restricted stock incentive plan to analyze the differences in plan design and implementation effects.This article draws the following conclusions: First,the incentive model suitable for the enterprise’s own characteristics is beneficial to the improvement of enterprise performance.When choosing a model,in addition to combining its own characteristics such as growth and property rights,companies must also consider factors such as the external macroeconomic environment.Second,the design of each element will have an impact on the effect of the implementation of the incentive plan.In terms of unlocking conditions,choosing accounting profit as the performance unlocking index is difficult to effectively reflect the long-term performance of the company and is not conducive to the development of the company;the setting of a single index cannot take into account the improvement of the company’s various capabilities;The incentive effect is not ideal.In terms of the recipients and the number of grants,both senior executives and non-senior executives should be considered,with core technical personnel as the mainstay.In terms of stock sources,private placement can alleviate the pressure on corporate cash flow and also deliver good information to the market.Third,the corporate governance structure and equity structure will affect the setting of the elements of the incentive plan.When the board of directors and the board of supervisors are small and the proportion of independent directors is low,managers are not under effective supervision,and the unlocking conditions will be set more loosely;when the proportion of major shareholders is low,they are more willing to grant more incentives stock.Based on the above conclusions,this article puts forward suggestions for the design of equity incentive plans for listed companies.While enriching the research on restricted stocks,it also hopes to provide reference opinions for other companies in the design of equity incentive plans,and to better play the incentive role of equity incentives to promote the long-term development of enterprises.