The Motivation And Performance Of Restricted Stock For Senior Managers Of The SOE Based On Yuntianhua

In recent years,with the goal of improving medium and long term incentive mechanism of state-owned enterprises,a series of policies supporting and guiding the implementation of equity incentive in state-owned enterprises has been issued.It aims to improve the enthusiasm of directors,senior managers and core members of state-owned enterprises,and revitalize the vitality and creativity of state-owned enterprises.Under the guidance of the government,the number of state-owned listed companies which implement equity incentives has maintained a momentum of continuous growth in the past five years,and the number has rapidly reached a breakthrough from 18 in 2016 to 92 in 2021.However,in spite of this,compared with the total number of more than 1000 state-owned listed companies in China,the proportion of stateowned listed companies implementing equity incentive is still very small,and there is still a great space for development.For state-owned enterprises,it is a valuable reform opportunity to carry out equity incentive in an orderly manner under the support and guidance of the government,and it is of great value to improve the medium and long term incentive of stateowned enterprises.This paper selects Yuntianhua Company for case study,which is one of the enterprises in the“Shuangbai Action” of state-owned enterprise reform.In 2018,Yuntianhua launched a restricted stock incentive plan as part of its SOE reform and has completed the second phase of unlock-up after a two-year lock-up period.This paper sorts out the contents of the incentive plan that Yuntianhua grants restricted stock to senior managers,analyzes the motivation and specific effects of implementing the plan.The author summarizes the successful practices in the incentive plan in Yuntianhua,points out where can be improved,and provides referential suggestions for the reform of equity incentive in other state-owned enterprises.This paper is divided into six chapters.In Chapter 1,the author describes the research background and significance of this paper,and sorts out the main viewpoints of academic research related to equity incentive for senior managers and enterprise performance.In this chapter,the author also introduces the overall research content and methods of this paper,the point of innovation and deficiency,establishing a framework for the following research.In Chapter 2,the author explains the related concepts and theories.In Chapter 3,the author introduces the background of the implementation of equity incentive in state-owned enterprises,and makes a statistical analysis of the situation and method of the equity incentive in stateowned enterprises.It also compares the difference between state-owned listed companies and private listed companies in implementing equity incentive.On this basis,Chapter 4 introduces the basic information of Yuntianhua and the detailed content of the restricted stock incentive plan,including incented persons,period,conditions and so on,as the basis of motivation and performance analysis.Then,Chapter 5 analyzes the motivation of restricted stock incentive plan for senior managers based on the arrangement and financial situation of Yuntianhua.The author also focuses on the changes on financial and non-financial performance after the implementing the plan,especially the completion of the performance conditions.Finally,this paper concludes in Chapter 6 that the restricted stock for senior managers effectively improves the profitability and reduces financial risks of Yuntianhua.It alleviates principal-agent relationship and increases the value of SOE.Meanwhile,the turnover rate during this period remained stable at a low level,and the stock shows more obvious progress compared with comparable companies in the same industry.The author points out that the incentive plan has room for further improvement in the control of risk and the grading of personal assessment.In this way,Yuntianhua can achieve more stable development,motivate senior managers more effectively and reduce principal-agent costs.To sum up,this paper studies a case of restricted stock incentive plan for senior managers of state-owned enterprises,aiming to understand the motivation and its impact on the performance of state-owned enterprises.By studying from this case,excellent experience can be summerized,and deficiencies can cause concern.With the support and guidance of the government,more and more state-owned enterprises have carried out equity incentive reform,and this number will continue to increase in the future.For that restricted stock is the main tool of equity incentive for state-owned listed companies at present,the case study of restricted stock is helpful to provide experience for state-owned enterprises’ equity incentive reform.