Analysis Of The Motivation And Effect Of ESOP Under The Background Of Mixed Ownership Reform Of SOEs

The 19th National Congress of the Communist Party of China proposed to deepen the reform of state-owned enterprises and promote the development of mixed-ownership economy.Since the Third Plenary Session of the 18 th CPC Central Committee,China has successively issued the "Decision of the Central Committee of the Communist Party of China on Major Issues Concerning Comprehensively Deepening Reforms" and "Opinions on the Pilot Program of ESOP in State-controlled Mixed Ownership Enterprises",giving instructions to the mixed ownership reform of SOEs and ESOP.From 2016 to 2018,three batches of 30 central SOEs have been approved by the SASAC to carry out mixed ownership reform and ESOP pilots.The ESOP has developed into an important means of mixed ownership reform of SOEs.And from 2016 to 2021,China has promoted 208 SOEs to carry out mixed ownership reform pilot projects,and the total number of mixed ownership reforms implemented by SOEs has exceeded 890,and 70% of the work has been completed.By the end of 2021,the number of SOEs in China will account for about 10% of the total number of enterprises in the country,and the proportion of SOEs in the country’s total economic output will be 66.06%.The development of mixed-ownership economy will help improve the property rights governance structure of SOEs,thereby ensuring the market competitiveness of SOEs.ESOP is an important breakthrough in deepening the reform of SOEs.On the basis of improving the company’s shareholding structure,it can effectively reduce the agency cost of the company and improve the corporate governance structure.By building a community of interests between employees and the company,it can give full play to human capital.It can also stimulate employee innovation,ensure the source of the company’s core competitiveness,and enhance shareholder value.In this context,an in-depth analysis of the motivation and effect of SOEs implementing ESOPs is of great significance for deepening the reform of SOEs.As one of the first pilot innovative technology enterprises in the new round of SOEs reform,China Electric Institute has human capital as its source of value creation,and the incentive theory believes that ESOP can stimulate employees’ enthusiasm and innovation.CEI attaches great importance to the incentive effect of ESOPs on employees.This thesis selects the ESOP implemented by CEI in May 2017 for case analysis.First,it uses the literature research method to elaborate on the mixed ownership reform of SOEs and the literature research on ESOPs;and introduces the mixed ownership reform.Concepts related to ESOP,the motivation and effect of ESOP under the background of mixed reform of SOEs,and the theoretical basis.Secondly,it introduces the specific content and implementation of the ESOP implemented by CEI under the background of mixed reform,and analyzes the motivation,scheme design and characteristics of its ESOP.Then,using the method of system analysis and comparative analysis to analyze the implementation effect of CEI’s ESOP,it is concluded that:(1)The ESOP optimizes CEI’s shareholding structure and improves its corporate governance structure;(2)The ESOP has improved the financial performance of CEI;(3)The ESOP has brought free cash flow to CEI,ensuring the core competitiveness of the company,thereby increasing shareholder value.Finally,an in-depth analysis of the mechanism of the ESOP of CEI under the background of mixed-ownership reform is deeply analyzed.This thesis draws the corresponding research conclusions and enlightenment according to the specific implementation of the ESOP of CEI.Among them,the research conclusions include:(1)Driven by multiple internal and external factors,CEI adopted an ESOP to carry out mixed-ownership reform,which proved to be very necessary and feasible;(2)"Employee shareholding + capital increase and share expansion",and at the same time adopts the shareholding model of "determining shares by position and adjusting dynamically" to jointly ensure the successful implementation of CEI’s ESOP;(3)The ESOP can improve the corporate governance structure,financial performance and shareholder value,and promote the high-quality development of the enterprise.Based on the above summary,this thesis draws relevant inspirations for further promoting and ensuring the implementation of ESOPs in SOEs under the background of mixed-ownership reform:(1)ESOPs can be used as an important means of SOEs mixed-ownership reform to promote comprehensive and deepen reform;(2)Continue to improve the construction of the legal system of ESOP to escort the successful implementation of the ESOP;(3)The plan of the ESOP should be scientifically formulated according to the actual situation of the enterprise to ensure the implementation effect.This thesis analyzes the motivation and effect of CEI’s implementation of the ESOP under the background of mixed reform,can summarize and analyze the pilot situation in time,further improve the relevant policies of the ESOP,and enrich the cases of the ESOP.The research provides a certain reference for SOEs to implement ESOP reform,and also provides a direction for the selection of SOEs’ mixed reform methods.