SG Company’s Equity Incentive Motivation And Implementation Effect Research

In 2016,the China Securities Regulatory Commission(CSRC)issued the Administrative Measures for the Implementation of Equity Incentives,and principles on Equity Incentives for Listed Companies Controlled by Central Enterprises in 2020 which provide guidance for central enterprises to implement equity incentives.Equity incentives play a certain role in reducing the problem of information asymmetry,reducing agency costs,improving the company’s incentive mechanism,improving the enthusiasm and creativity of employees and improving the company’s performance.As a new material company in the chemical industry,SG has implemented three equity incentive plans,so studying SG’s equity incentive has certain theoretical value and practical significance.Firstly,starting from the research background,this paper sorts out and summarizes the relevant literature of equity incentive theory,equity incentive motivation and implementation effect of equity incentive at home and abroad,and defines the relevant concepts,basic elements,principles and main methods of equity incentive.Secondly,the three equity incentives of SG Company were elaborated in depth,and the motivation of the implementation of equity incentives was analyzed based on the Principal-Agency Theory,Motivation Theory and Human Capital Theory.Thirdly,(1)by calculating the excess rate of return and cumulative excess rate of return on the announcement date of SG Company’s incentive plan by the event research method to analyze the market response,it is found that the first equity incentive plan has certain positive effects,but the duration is shorter,and the effect of the second equity incentive plan is better than that of the first time.(2)Using the traditional financial index analysis method,it is found that the implementation of equity incentive plans has a significant improvement in profitability in terms of long-term financial performance,and also has a certain role in promoting solvency and growth ability,but the effect on improving operating capacity is not significant.(3)The factor analysis method was used to calculate the comprehensive score of the implementation effect of equity incentives,and the results showed that the comprehensive ability of enterprises implementing equity incentives was generally stronger than that of enterprises that did not carry out equity incentives.(4)Using non-financial performance such as R&D personnel and R&D investment to evaluate equity incentives,it is found that equity incentives can help improve the innovation ability of enterprises.At last,this paper sums up the pros and cons of SG implementing the stock ownership incentive scheme,and gives some advice on how to deal with the liabilities,avoid the liability risk,enhance the motivation of stock ownership motivation,and make appropriate extension of the guarantee period.Effective period of equity incentives,and setting diversified performance Assessment index.