A Study On The Economic Consequences Of Employee Stock Ownership Plan Under The Trust Model

The employee stock ownership plan first originated in the United States in the 50 s of the20 th century,and only appeared in China after many years of development abroad.As China’s capital market becomes more mature,employee stock ownership plans have gradually become popular in China after experiencing ups and downs in China.The Interim Measures for the Administration of Employee Stock Ownership Plans of Listed Companies promulgated by the China Securities Regulatory Commission in 2012 marks that employee stock ownership plans are about to be implemented in China.In 2014,the China Securities Regulatory Commission(CSRC)promulgated the Guiding Opinions on the Implementation of Employee Stock Ownership Plans by Listed Companies,which for the first time proposed that in the management mode of employee stock ownership plans,qualified asset management institutions can accept the entrustment of listed companies to manage the assets of employee stock ownership plans,which is of great significance for Chinese listed companies to adopt the trust model when implementing employee stock ownership plans.Since then,many listed companies in China have begun to actively implement trust-model employee stock ownership plans.However,in recent years,many listed companies have been forced to cancel the trust-model employee stock ownership plans that were introduced because they did not achieve the expected results or were contrary to the original intention of the launch.In this context,it is interesting to study the implementation of employee stock ownership plans in trust models by listed companies.Based on the existing literature and theory of domestic and foreign ESOPs,this paper studies ST Toyo’s first phase of trust model ESOPs.First,we will analyze ST Toyo’s overview and the details of the first phase of the ESOP.Next,the reasons why ST Toyo implements an employee stock ownership plan in a fiduciary model are examined.Finally,the impact of ST Toyo Trust Model Employee Stock Ownership Plan on corporate governance and the impact of ST Toyo’s economic consequences is analyzed.It is found that the implementation of employee stock ownership plan under the trust model has its unique advantages compared with other models;The trust model employee stock ownership plan can optimize the company’s equity structure;The implementation of the ESOP has improved the company’s employee structure,and the impact of the ESOP on ST Toyo’s financial dimension is less significant.In this regard,this paper puts forward five suggestions: ST Toyo needs to increase the proportion of employee stock ownership plans to total share capital,pay attention to long-term incentives for employees,pay attention to risk prevention during the implementation of employee stock ownership plans,enrich the sources of funds and shares of employee stock ownership plans,and disclose the implementation of employee stock ownership plans in a timely manner.