Research On Long-term Performance Of State-owned Enterprise ESOP

Since the 18th National Congress of the Communist Party of China(CPC),the long-term incentive policies of state-owned enterprises have been constantly mentioned.The 2021 annual government report once again emphasized the reform of state-owned enterprises.As an important means to realize the reform of state-owned enterprises,ESOPs(Employee stock-ownership plans)have received a lot of attention in both theory and practice.And a lot of scholars and entrepreneurs have discussed or practiced the policy experiments and mechanism design of ESOPs.Firstly,based on the ESOP of CNEAR(China National Electric Apparatus Research Institute Co.,ltd),this paper concluded Chinese special design of ESOPs and analyzed the background of CNEAR’s ESOP.Then,it introduced how CNEAR had implemented its ESOPs.Lastly,it studied this company’s long-term performance-ESOP relation and provided some suggestions for ESOP reform of Chinese state-owned enterprises.Based on principal-agent theory,human capital theory,two-factor theory and incentive theory,this paper analyzed the influence of ESOPs on companies’ performance in various aspects.Secondly,this paper summarized the development history of ESOPs of China and the characteristics of China’s listed ESOP companies,and concluded the commonness and characteristics of ESOP companies.Then,through the specific case analysis of CNEAR,I summarized its characteristic ESOP and studied its performance-ESOP relation based on financial and non-financial data from 2016 to 2020.The study showed that the comprehensive performance of CNEAR had been improved after the implementation of the ESOP,but there was still a tendency to pursue short-term interests.Finally,based on the study,I provided some suggestions for ESOPs reform of Chinese state-owned companies.From the perspective of companies,they should strengthen the management responsibility and improve the ESOPs mechanism,perfect supervision mechanism.Besides,management ought to put their views on companies’ long-term interests.From the perspective of the government,it is necessary to introduce policies more suitable for ESOPs,constantly break the centralized administrative thinking and promote the market-oriented reform process of the companies.