Analysis Of The Motivation And Effect Of Equity Incentives Of Listed Companies

With the development and continuous improvement of the modern enterprise governance system,more and more enterprises have adopted the manager system,which has led to the separation of modern enterprise ownership and management rights,resulting in the problem of entrusted agency.In order to effectively solve this problem,many companies have introduced equity incentive systems to combine the interests of managers with the interests of the company,so that the goals of operators and shareholders are aligned,so as to avoid short-sighted behavior by management for their own interests and damage the interests of the company.In addition,scientific and effective equity incentive plans can improve employees’ work enthusiasm and sense of belonging to the company,help the company retain core employees,attract more outstanding talents,and contribute to the long-term development of the enterprise.After the listing of LONGi,the profitability continues to increase,the market value increases year by year,the scale of the enterprise continues to expand,and gradually grows into a leading enterprise in the photovoltaic industry,which is inseparable from its scientific and effective equity incentive plan,in a sense,LONGi is a successful equity incentive case.With the introduction of the national parity policy,the government’s subsidies for the photovoltaic industry have gradually decreased,and the competition in the industry has become increasingly fierce,in order to attract and retain talents,LONGi has implemented an equity incentive plan,improved the company’s governance system,improved the company’s business performance,and laid the status of a leading enterprise.In this paper,LONGi is selected as the case study object,and the case analysis method,comparative research method and literature review method are used to study the two equity incentive plans of LONGi.Firstly,the relevant literature of equity incentive at home and abroad is sorted out,and the definition,types,elements and motivation of equity incentive are introduced.Secondly,the company situation and implementation motivation of LONGi were analyzed,and the two equity incentive plans were compared,and the evaluation system was constructed from both financial and non-financial perspectives when evaluating the implementation effect of equity incentives.From a financial point of view,the implementation of the two equity incentive plans has improved the profitability,operating ability and development ability of LONGi,and the first improvement effect is better than the second one,but it has not played a positive effect in improving the solvency of the enterprise.From a nonfinancial point of view,the company’s scientific research investment has increased year by year,achieved certain results in patent projects,the turnover rate of key employees has decreased,the overall quality of employees has been improved,and more outstanding talents have been attracted to join.Finally,in view of the above analysis conclusions,this paper draws enlightenment to determine a reasonable incentive range,set a reasonable incentive price,set scientific assessment standards and strengthen internal supervision.The implementation of equity incentive plans can improve employees’ enthusiasm,stabilize internal core employees,attract external talents,improve business performance,and promote the long-term development of enterprises.This paper takes LONGi,which successfully implemented the equity incentive plan,as a case study,which can provide experience and reference value for other companies in the PV industry when implementing the equity incentive plan.