Research On The Implementation Effect Of ESOP Under The Background Of Mixed Ownership Reform

The adoption of Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensive Deepening Reform at the Third Plenary Session of the 18th Central Committee of the Communist Party of China marks a new stage of the mixed-ownership reform of state-owned enterprises in China.As one of the important implementation approaches of the mixed-ownership reform,ESOP has attracted public attention.Since then,the relevant departments of the state began to gradually introduce relevant guidelines,as well as policy norms.This shows that in recent years,ESOP has begun to regain the attention and support of the state,and the relevant policies are gradually improved.With the continuous deepening of mixed ownership,China has gradually launched a series of pilot SOEs since 2015.However,due to the new round of ESOP in China just started,the supporting policies,laws and regulations are not yet perfect.At the same time,there is a lack of complete cases from the public ESOP draft to the end of the unlocking period,and the cases that can provide practical experience are limited.From a theoretical point of view,then puts forward the concept of employee shareholding in the 1950 s,western vision and employee shareholding in China in recent years to return to the public,so for employee shareholding of the related research scholars in our country started relatively late compared with western scholars,the reform of state-owned enterprises under the socialist system can’t fully referring to the case of western companies,the lack of theoretical guidance of corporate practice.Domestic scholars’ studies on the motivation,path and effect of ESOP are mostly empirical analysis,and the results are controversial and still in the pilot summary stage.Therefore,this paper takes the ESOP issued by SIPG in 2014 as the research object,and analyzes the case by case study method,so as to provide reference for other state-owned enterprises that plan to implement ESOP.SIPG is a large port state-owned enterprise controlled by Shanghai State-owned Assets Supervision and Administration Commission(SASAC).It is one of the first state-owned enterprises in Shanghai to pilot the ESOP.The ESOP plan issued by SIPG has a long duration,typical design and great social influence,which can be used as a typical example for analysis.Firstly,this paper reviews relevant literature on mixed ownership reform and ESOP and sorts out relevant theories,which lays a theoretical foundation for this paper.Again from port group on the specific case of employee stock ownership plan,first of all case situation has carried on the brief introduction,analyzes the implementation of employee shareholding internal motivation and external motivation,evaluation mechanism and characteristics of the scheme design,and from the capital market reaction and financial performance and incentive effect three angles analyzes the implementation effect.This paper mainly answers three questions:the motivation,path and effect of ESOP in listed companies of state-owned enterprises.The conclusions of this paper are as follows:First,the main motivations for implementing ESOP in state-owned enterprises include policy support,industry competition,improvement of governance structure,and optimization of debt structure.It can be inferred that the factors suitable for ESOP implementation include the intensification of competition in the industry of the company and the large demand for talents;Due to the high concentration of state-owned ownership,enterprises need to realize diversification of ownership and promote the transformation and upgrading of corporate governance.Facing the pressure of capital need to optimize the debt structure.Secondly,as for the impact of SIPG’s implementation of employee stock ownership,SIPG’s employee stock ownership plan has been recognized by market investors and has led to a favorable market response.The profitability and debt paying ability of the enterprise are improved significantly within the duration,and are conducive to the subsequent financing of the enterprise.Third,employees’ motivation,talent attraction and R&D capability will be greatly improved in the short term,but the incentive effect begins to weaken in the later period.Through case analysis,this paper draws the following enlightenment:First,for state-owned enterprises,they should first make clear whether they are suitable for implementing ESOP,and should not blindly follow the trend.When it meets the characteristics of ESOP,attention should also be paid to the design of ESOP scheme.Every element should be scientific and reasonable,which should not only meet the practical needs of the enterprise but also be designed for the sake of employees.Secondly,the ESP performs well in its lifetime,but the long-term effect of ESP should also be paid attention to and corresponding countermeasures should be found.Third,at the regulatory level,we should improve supporting policies and regulations on employee stock ownership and attach importance to the role of mixed-ownership reform pilot enterprises.This paper selects real cases of mixed reform and ESOP of state-owned enterprises to study its motivation,implementation process,implementation effect,etc.At the theoretical level,this paper compares the analysis results with relevant theories,which can demonstrate and improve the theory.At the practical level,it is hoped to provide case experience for the promotion of ESOP and provide inspiration for policy makers.