Analysis On Medium-and Long-Term Equity Incentive Mechanism Of SG Group Operators

The current market is very competitive and companies are struggling to improve their competitiveness,therefore,the use of equity incentives is becoming increasingly widespread.In addition,companies will develop new equity incentive programs according to the external environment and the development needs of the company.Restricted stock,as a common type of equity incentive,can effectively motivate the company’s employees and thus promote the company’s development.Through equity incentives,the interests of operators and shareholders can be unified,agency costs can be reduced,and financial pressure can be alleviated,thus further improving the management of the company.China has now regulated the equity incentive system,and many companies have achieved better results after implementation,but there are also some companies where the incentive effect is not significant,and even has a negative impact.This phenomenon arises mainly because of the imperfection of the equity incentive mechanism.Therefore,how to design the equity incentive for the actual situation of the company and the current situation of the industry in order to solve the problems of proxy,retaining talents and keeping the vitality of the company.The case study selected in this paper is SG Group,as a leader in the electrical and new energy industry,SG Group conducts equity incentives and continuously improves its own incentive mechanism in the process according to the actual operating condition of the group and the trend needs of the industry development.SG Group has conducted two equity incentives so far,proposed in 2018 and 2021,both Both are restricted stock incentive plans.However,the background and focus of the two incentive plans as well as the effect after implementation are not quite the same.By analyzing the contents and effects of the two incentive plans and comparing the relevant indexes,this paper aims to find out the advantages and shortcomings of the equity incentive design and make suggestions,which are of reference significance for listed companies to introduce new equity incentive plans.The paper starts from analyzing the value of this research and then extracting the main issues of this research by firstly analyzing the relevant national policies and the development needs of state-owned enterprises;then conducting a literature review on the current situation of domestic and foreign research and introducing this research on the basis of the current research situation.Then,we analyze the gaps in the domestic and foreign literature and explain the necessity of this research;then we analyze the implementation plan and the effect of the medium and long-term equity incentive mechanism implemented by SG Group,and analyze the significance and shortcomings of the medium and long-term equity incentive of the enterprise;through the study of the whole paper,we provide reference for other state-owned enterprises to improve the equity incentive mechanism.The main conclusions of this research are:(1)restricted stock equity incentive is the key to SG Group’s super-speed development and has a decisive role in retaining core talents;(2)SG Group’s two equity incentive plans have played a positive role in promoting the transformation of scientific and technological achievements;(3)equity incentive plans have effectively reduced SG Group’s principal-agent costs;(4)SG Group’s equity incentive plans have played a positive role in promoting(4)The equity incentive plan of SG Group has played a certain effect in promoting the development of the company and improving the performance of the enterprise;however,there are still problems such as insufficient incentive,too high requirements of the assessment index and imperfect internal supervision mechanism;(5)In view of the shortcomings of the equity incentive plan of SG Group,this paper puts forward the corresponding optimization suggestions.It is pointed out that the general idea of SG Group’s equity incentive plan is to focus on the incentive targets,link with performance,improve the welfare treatment based on people,and use equity incentive as long-term incentive and organically combine with short-term incentive;the principles of the construction of SG Group’s medium and long-term equity incentive plan should follow the principles of shareholders’ voluntariness,efficiency and fairness and organic unity of distribution,and the principles of moderate duration and strength,and the coexistence of constraints and incentives.