Research On The Effect Of Multi-period Equity Incentives In The High-tech Enterprises

As a long-term incentive mechanism,Equity incentive can grant stock options to the employees in the company,to turn their administrators into owners to operate the company,share profits and take risks,so as to achieve the incentive effect.The emergence of equity incentive effectively alleviates the principal-agent problem of enterprises,and also provides a powerful means for enterprises to attract more talents,improve talent stickiness and maintain the long-term stability of the talent team.The equity incentive plan appeared for the first time in the United States,and then gradually in Japan,Britain,France and other capitalist countries.At the end of the1890 s,Chinese listed companies launched an equity incentive plan for the first time.The completion of the reform of non-tradable shares in China in 2005 and the formal trial implementation of the new Company Law,Securities Law and Management Measures for Equity Incentive of Listed Companies in 2006 also indicate that the development of equity incentive in China has entered a standardized period.Since then,as China’s capital market system tends to be longitudinally deepened and standardized,and the relevant supporting policies and regulations of equity incentive continue to be refined and improved,China’s equity incentive has gradually entered a period of rapid development,and the use of equity incentive by listed companies also tends to be normalized.This paper selects two gem listed companies from the information technology services industry-Handex Information and Wangsu Science & Technology as cases.The paper analyzed the plans of the two companies’ continuous multi-period equity incentive,finding that Handex Information and Wangsu Science & Technology made the same choice on the set of incentive object,validity and performance indicators,and the difference between the two is mainly in the setting of incentive model,intensity and exercise ratio.Then the paper compares the two case companies’ and the industry’s financial performance and non-financial performance to assess their arousal effect.Found that the debt paying ability of the high-tech enterprises which implement the continuous multi-period equity incentive will drop,but their operating performance and financial performance will continually rise.In addition,the announcement of the continuous multi-term equity incentive plan can enhance the value of the company in the capital market in the short term,and the implementation of the incentive plan can also significantly improve the company’s innovation ability,promote the output of innovative product,and improve the company’s non-financial performance.Finally,based on the results of this case analysis,this paper puts forward some suggestions for high-tech enterprises to implement continuous multi-term equity incentives.