Analysis On The Impact Of Equity Incentives On R&D Capabilities For Huawei

After the United States successively sanctioned Chinese high-tech companies,China realized they must improve the independent.Cause the uncertainty of the independent research,the large investment cost and the long return period,the management of the enterprise is worried about short-term operating data and dare not give it a go.The reason for this situation is that business owners and managers have different goals.Equity incentives can converge the long-term interests of the two,which is a long-term mechanism for stimulating enterprise research and development.Huawei has developed from a small firm which registered capital of ￥21,000 to a world-leading communications giant.Its equity incentives have played an important role in driving technology upgrades.Therefore,the choice of Huawei as a typical case in the thesis has a much important value.The thesis uses case analysis to study the impact of equity incentives on corporate R&D capabilities.First,through case introduction to understand the basic situation and equity structure of Huawei,review and sort out the examples of Huawei’s five policy changes over the past 30 years,and understand the background.Then the paper selects the five-year equity incentives launched by ZTE in the same industry in 2014 to compare and analyze Huawei’s TUP equity incentive policy,compare the two equity structure and equity incentive policies,and obtain the long-term,high coverage and dynamic incentive effects of Huawei’s equity incentives.Features.Afterwards,the R&D cost-benefit method was used to compare the differences between the R&D investment and R&D output indicators of the two,and summarize the role of Huawei’s equity incentives in promoting R&D investment,expanding and stabilizing the R&D team,and increasing the number of patent applications and authorizations of enterprises.Finally,summarizing the advantages and disadvantages of Huawei’s equity incentives,Huawei’s equity incentives have the long-term role of promoting corporate research and development,solving external financing and constraining employees,but they also have deficiencies such as diluting the shareholding ratio of senior and major shareholders and weakening equity financing.At the same time,the experience gained from Huawei’s equity incentives is used as a summary to provide some suggestions to other companies.