Research On The Implementation Motivation And Effect Of Haixin Energy Tech Equity Incentive

In order to reduce the agency cost and let managers pay more attention to the interests of shareholders,modern enterprises usually adopt the way of equity incentive,so that managers can hold equity and share interests and risks with shareholders to a certain extent,thus restricting managers’ short-term behavior and reducing moral hazard.Because equity incentive is both binding and incentive,it was first used to solve the agency problem in European and American countries in the 1950 s.In 2006,China Securities Regulatory Commission,in order to promote the standardized operation of listed companies,launched the Equity Incentive Management Measures of Listed Companies(Trial)(hereinafter referred to as the Measures(Trial)).Since then,equity incentive has been more and more widely used in the domestic capital market as a medium and long-term incentive tool.At the same time,chemical enterprises also conform to the market trend to join the army of equity incentive.But because chemical industry has high correlation with other industries,it is greatly affected by the macroeconomic cycle.And the chemical industry is a capital-and technology-intensive industry with a long R&D return cycle.When implementing equity incentive,many enterprises only pay attention to the short-term incentive effect and ignore the consideration of other aspects,which will make the design of equity incentive plan divorced from the actual situation of the company and the market,and thus lead to the poor effect of equity incentive and even the termination of the incentive plan.Therefore,it is particularly important to formulate a set of equity incentive plans that not only adapt to the internal and external environment of the enterprise,but also balance the short-term interests and long-term development of the enterprise.In this paper,Haixin Energy Tech,a chemical industry company,is selected as a case enterprise.Starting from the motivation and implementation effect of its equity incentive,its equity incentive scheme is evaluated and suggestions for improvement are given.The main body first introduces the background and significance of the case study in this paper,combs the representative views of domestic and foreign scholars on equity incentives from different angles and summarizes the research status.Then,the relevant concepts and theories of equity incentive are elaborated,and based on these theories,the action mechanism of equity incentive is analyzed.In the third chapter,the macro environment of the industry and the micro environment within the company faced by Haixin Energy Tech are introduced accordingly.The fourth part analyzes the reasons for implementing equity incentives in the case enterprise,and provides a detailed introduction and comparison of the two phases of equity incentives from the content of the plan to the implementation situation.Afterwards,a deep analysis was conducted on the implementation effects of Haixin Energy Technology’s two phases of equity incentives from the perspectives of market response,financial dimensions,and non-financial dimensions.After analysis,this paper believes that there are the following problems in the equity incentive of Haixin Energy Tech:(1)the setting of the exercise conditions is loose;(2)Single performance evaluation index;(3)the period of validity is short;(4)The executive incentive is too high,and the internal governance needs to be strengthened.The following suggestions are put forward:(1)Set reasonable conditions for exercising the right;(2)The introduction of multiple performance evaluation indicators;(3)Appropriately extend the validity period of equity incentive;(4)Improve the company’s internal governance mechanism and enhance information transparency.