Huayu Software Equity Incentive Implementation Effect Research

With the market segmentation and intelligence,modern enterprises are developing and growing,and their requirements for management ability are also higher and higher.The management ability of the enterprise owners can not meet the expansion of the enterprise,and then produce professional managers,which makes the enterprise ownership and management rights gradually separate,resulting in asymmetric information.However,if the owners want to comprehensively supervise the enterprise,it is not feasible.In order to protect the interests of owners,people have made a lot of attempts,among which equity incentive system has emerged.Since 2006,the government and the regulatory department have implemented a number of management measures to integrate the equity incentive system into enterprise management,which has promoted the rapid development of enterprise equity incentive.Many enterprises in China have begun to implement equity incentive plans.As a leading e-government service and solution provider in China,Huayu's in-depth research on equity incentive can enrich the theoretical research of equity incentive in China's information technology industry and provide some reference for relevant enterprises to implement equity incentive.Based on the perspective of principal-agent theory,human capital theory and two factor incentive theory,this paper uses the methods of literature research,case analysis and event analysis to conduct an in-depth study on the motivation,elements and implementation effect of the four phases of equity incentive implemented by Huayu from 2012 to 2018.Through the analysis of its financial performance,it is found that:First,after the implementation of incentive,its profitability has increased in the first two periods,and decreased in the second two periods;Secondly,except for the first period,the solvency decreased,and the latter three periods were optimized;Third,the operating capacity has been improved in the first,second and fourth period of equity incentive;Fourth,the ability of growth has been improved in the first and fourth phases;Fifth,agency costs decreased in the first,second and fourth phases.In terms of non-financial performance,the R&D innovation ability is continuously improved.Meanwhile,through the analysis of event study method,it is found that the first,second and fourth phase equity incentive schemes of Huayu have received positive short-term market reaction,while the third period of equity incentive has not been optimistic in the market in the short term.From the long-term market reaction,Huayu has been recognized by investors.Finally,according to the analysis of the case,it summarizes the experience and shortcomings of Huayu's implementation of equity incentive.Huayu's experience lies in the combination of the plan and long-term strategy,the formation of a long-term incentive mechanism,the continuous improvement of the internal assessment mechanism,and the incentive object more inclined to technical personnel and business personnel,which improves the overall creativity of the enterprise.At the same time,there are also some shortcomings,such as single performance evaluation index,low exercise conditions and low matching degree of incentive mode.Based on this,this paper puts forward the corresponding suggestions:First,to formulate a multi-level performance appraisal system and reasonable exercise conditions;The second is to adopt diversified incentive mode;Third,the incentive scheme should be set up according to the internal and external environment;Fourth,establish a diversified talent incentive system;Fifth,improve the supervision of the capital market and improve the effectiveness of the market.