Research On The Reasons And Implementation Effect Of Baolihua New Energy’s Employee Stock Ownership Plan

The Employee Stock Ownership Plan(ESOP)is an equity incentive tool designed to improve employees’ sense of belonging,work enthusiasm,and loyalty by granting them company stocks.China began developing and implementing ESOPs in the 1990s.With the stable growth of the domestic securities market and the government’s support for ESOPs,they have gradually been widely adopted.Currently,ESOPs have become an important tool for incentivizing employees in many companies in China.The Chinese government has been continuously strengthening its support for and improving related policies on ESOPs in recent years to promote their promotion and implementation.Domestic research on ESOPs has mostly focused on empirical studies and tends to be biased towards successful cases,with few case analyses of companies with poor ESOP implementation results.Before analyzing Baolihua New Energy’s ESOP,relevant literature was consulted,and scholars’ theoretical research on employee stock ownership at home and abroad was analyzed.Next,a brief introduction to the company’s profile and business situation was provided.Finally,the specific implementation plan of the ESOP published by Baolihua New Energy was analyzed in detail,including funding sources,stock sources,management methods,lock-up periods,and survival periods.This study combines the policy content and market environment before and after the implementation of the employee stock ownership plan(ESOP)in the company,and analyzes the motives of the implementation of the ESOP in Baolihua New Energy.The external motive is due to the favorable policy of the ESOP and intensified industry competition,while the internal motive is to reward the performance of core employees,attract and motivate talents,and improve employee work enthusiasm.Then,the performance of Baolihua New Energy from before the implementation of the ESOP to the present is longitudinally compared,and a comprehensive analysis is conducted from both financial and non-financial perspectives.From the financial perspective,the implementation of the ESOP has not had a positive impact on the company’s profitability,debt-paying ability,and operating capacity.From the non-financial perspective,the number of employees and revenue have not increased,and the stock price in the secondary market has not risen.Later,through horizontal comparison,it was found that the implementation of the ESOP did not have a significant differentiation from companies that did not implement the ESOP.Based on the above analysis,the study shows that the implementation effect of the ESOP in Baolihua New Energy is unsatisfactory,with no significant positive impact on company performance,no reduction in agency costs,no effect on stock price increase,and the incentive plan becoming a tool for management to seek profit.This article analyzes the possible problems in the implementation of the ESOP in Baolihua New Energy from six aspects:implementation timing,employee participation,funding sources,shareholding proportion,shareholding period,and performance evaluation system.The successful experience is summarized as grasping the appropriate implementation timing and stabilizing the core team of the enterprise,while the lessons learned are unreasonable incentive targets,single funding sources,insufficient number of shares in the plan,prolonged duration for management to seek profit,and no performance evaluation system.Finally,this article puts forward relevant suggestions,including strengthening the rationalization of the ESOP system,establishing a sound management incentive and supervision mechanism,improving relevant legal system construction,and creating a win-win situation for both enterprises and employees.