Case Study On Equity Incentive Plan Of STAR Market

The equity incentive plan was born under the background of the separation of operating rights and ownership.It is precisely in this context that the problem of corporate agency costs has urged the development and improvement of equity incentive plans.For equity incentive plans,they are essentially for the company's shareholders.To prevent short-term profit-seeking behavior of the company's actual management,and to give the management company shares,to a certain extent,eliminate agency costs.Nowadays,the equity incentive plan system has developed more maturely in some economically developed countries.In 2019,my country's sci-tech innovation board market began to offer shares,and some technological innovation enterprises that conform to the national strategy are listed here.Most of these companies take high-tech talents as their core and product and service innovation as their competitiveness.It is the development strategy of these companies to ensure that they continue to innovate.Since then,the use of equity incentive plans to ease employment pressure among companies has become the preferred method for most companies.As far as my country is concerned,the economic development is not as fast as that of developed countries in Europe and America,and the implementation time of equity incentive plans only appeared in the 1990 s,which was significantly later than that of economically developed countries.At present,most companies are still in the trial operation of equity incentives.Most of the companies that have completed the trial operation still have not achieved the desired results.The Science and Technology Innovation Board has even introduced an equity incentive system in line with the characteristics of science and technology enterprises.This article is based on the new system launched by the Science and Technology Innovation Board as a starting point to make an in-depth analysis of the equity incentive plan implemented by Le Xin.The purpose is to provide a reference for other companies implementing equity incentive plans.The theoretical basis of this article involves human capital,principal-agent and two-factor theory,searching for relevant literature,collecting data,drawing icons,and analyzing Le Xin's equity incentive plan as the object of analysis.Since the listing of Le Xin Technology in 2019,the company has implemented two equity incentive plans.This article merges the two equity incentive plans into the research object,analyzes the company's motivation for implementing the equity incentive plan,and introduces the equity incentive plan.Specific settings,such as incentive objects,exercise period,grant date,exercise conditions,etc.,and analyze its characteristics as a sci-tech innovation board enterprise in the setting of equity incentive plans.In addition,it also analyzes the effects of the two-phase equity incentive plan implemented by Le Xin Technology,starting from the characteristic setting of Le Xin's equity incentive plan content,and specifically promotes the increase and increase of enterprise R&D investment from the establishment of Le Xin's characteristic equity incentive plan.Starting from four aspects: reasonable tax avoidance motivation of management,reduction of the overall agency cost of the enterprise,and optimization of the equity structure and employee structure,the analysis of the path that the implementation of the equity incentive plan has an effect on improving the company's performance,and the relationship between the setting of the equity incentive plan and the path Perform analysis.Finally,the implementation effect of Le Xin's equity incentive plan is evaluated in three dimensions: non-financial performance analysis,financial performance analysis,and market effect analysis.Based on the conclusions drawn,it will provide Le Xin Systems and other listed companies on the Science and Technology Innovation Board with recommendations that can be referred to.The analysis of the new regulations of the sci-tech innovation board equity incentive plan and the impact of the new regulations on the sci-tech innovation board enterprise equity incentive plan,as well as the role of the equity incentive plan in improving the performance of the company in all aspects are the innovations of this article.After analysis,after Le Xin's implementation of equity incentives,in addition to non-financial performance,it has helped companies to ensure the number of high-quality talents,improve technological innovation capabilities,and improve management models.At the same time,financial performance has been affected by the epidemic.The overall level of the industry is at a declining level as of 2020,but the data level of Le Xin is at an upstream level in the industry.Finally,after analyzing Le Xin's stock price using the event analysis method,it was found that after the implementation of the equity incentive plan,the stock price fluctuated significantly.At the same time,according to the data,the implementation of the equity incentive plan was favored by stockholders and believed that it could help Lexin development.At the end of this article,from the case study of Le Xin's equity incentive plan,some experiences and points of concern for the company's implementation of equity incentives are drawn.First of all,in terms of experience,Le Xin Systems has formulated a reasonable plan,selected an appropriate incentive scale and divided appropriate incentive objects.Secondly,this article believes that when implementing an equity incentive plan,attention should be paid to appropriately increasing the multi-dimensional assessment indicators.In order to increase the continuity and effectiveness of the equity incentive plan,the validity period of the equity incentive plan can also be appropriately extended and the proportion of equity incentive shares should be appropriately increased.At the same time,the market should also strengthen market supervision of new companies,so that equity incentives can become a tool to truly help companies improve their performance.