A Study On The Motivation And Performance Of The Revision Of Stock Option Incentive Plan

With the rapid development of market economy,the influence of equity incentive in modern enterprises is more and more remarkable,which plays an important role in the environment of increasingly fierce competition,so since 2006,more and more listed companies in our country have introduced and implemented the equity incentive plan in their management strategy.However,a large number of listed companies because of the repeated volatility of the stock market,the price of individual stock is always lower than the exercise price,resulting in the final incentive effect is not ideal,even had to withdraw its incomplete incentive plan ahead of time.This reflects that the practice of China’s stock option incentive plan is not yet mature,there are many problems to be solved,in addition,whether listed companies should revise the immature stock option incentive plan before launching it,this problem has attracted wide attention from all walks of life.As the "pioneer" of soya-bean milk machine,Joyoung shares have a high market share in the small home appliance industry,but as other brands began to get involved in the soya-bean milk machine market,Joyoung shares are facing great sales pressure.In order to improve its performance and competitiveness,Joyoung launched its first equity incentive scheme in 2011,but was forced to terminate it after only a few months;in 2014,the scheme was revised and successfully implemented in Joyoung.This revision process provides an opportunity for the research on the revision of the stock option incentive plan of China’s listed companies.Taking Joyoung shares as an example,we analyze the causes and economic consequences of the revision of the Corporate Equity Incentive plan.This paper first reviews the literature on Equity Incentive,then analyzes the specific contents of the double equity incentive plan in Joyoung,this paper analyzes the internal and external environment and the implementation motivation of the stock ownership incentive revision in Joyoung,and finds that an important motivation is to implement the diversification strategy transformation to enhance the company value;Finally,this paper studies the economic consequences of the revised stock option incentive scheme in Joyoung and draws the following conclusions: for the listed companies that implement stock option incentive,to ensure the rationality and effectiveness of the equity incentive scheme,we should perfect the internal governance of the company and select diversified performance appraisal indicators.On the other hand,we need reasonable incentive and timing,perfect incentive object,and scientific incentive plan design to make the plan implement smoothly.Through the study of the two equity incentive schemes of Joyoung shares,we find that the above five aspects have certain impact on the implementation of equity incentive schemes,which will ultimately affect the effect of the implementation of equity incentive.