The Impact Of Company M’s Equity Incentive Plan On Enterprise Performance

After China’s 2005 equity split reform,more and more listed companies have started implementing equity incentive plans,striving to reduce agency costs,attract and retain talent,enhance core competitiveness,and improve company performance.China’s equity incentives started relatively late,and the relevant incentive system and laws and regulations are still gradually improving.China has successively issued relevant laws and regulations such as the "Trial Measures for Implementing Equity Incentives in State Owned Listed Companies(Domestic)",the "Management Measures for Equity Incentives in Listed Companies",and the "Guidelines for Implementing Equity Incentives in Central Enterprise Controlled Listed Companies",laying a solid foundation for the development of equity incentives in China.However,when it comes to the impact of equity incentive implementation,domestic and foreign experts have their own opinions,and a large number of cases are still needed for practice and testing.As a leading enterprise in the home appliance industry,M Company strives to improve its performance in all aspects by formulating and implementing multi-level and long-term equity incentive plans.This paper focuses on the equity incentive plan of M Company and further explores the impact of listed company equity incentive plans on corporate performance.The paper first clarifies the research background and significance,conducts literature review and sorting,and organizes it into three aspects: motivation research,element research,and implementation effect research.Then,relevant definitions and basic theories are determined.Then,M Company was selected as the research object of the paper to analyze its equity incentive plan and implementation situation.Then,this paper uses event study,financial index analysis method and efficiency coefficient method to emphatically analyze the implementation of multiple equity incentives in M Company: use event study to judge the different short-term responses of the market to its multiple incentive plans from the fluctuation of market share price before and after the implementation of equity incentives;Conduct a longitudinal analysis of its financial data from 2012 to 2021 using the financial indicator analysis method;In addition,this paper selects four benchmark enterprises,namely two enterprises in the same industry that have implemented equity incentives and two enterprises that have not yet implemented equity incentives,and uses the efficiency coefficient method to rank their comprehensive performance and compare their financial performance horizontally.At the same time,analyze the incentive plan of M Company from the perspective of non-financial performance,and finally evaluate the equity incentive plan of M Company and provide suggestions.This paper concludes through research on the implementation of equity incentives in M company that the incentive plan implemented by M company has to some extent made the market respond positively,improved enterprise performance,and promoted the business development of M company in certain aspects.M Company is a relatively successful listed company in China in promoting equity incentives,and its incentive plan has high reference value for other listed companies.