Research On The Motivation And Economic Consequences Of Large Shareholders’ Reduction Based On Employee Stock Ownership Plan

The Employee Stock Ownership Plan’s guidance in 2014 and the new regulations of shareholding reduction in 2017 have resulted in a growing number of instances of employee stock ownership plans through the reduction of major shareholders in the capital market.The document study that the employee stock ownership plan brings positive market reactions,whereas the reduction of major shareholders usually leads to negative ones.So,what economic consequences will be if the major shareholders reduce stake under good and bad news about the enterprise?In this paper,the case study method will be used to select the major shareholders of Jereh’s shares,which are representative of the private oil service industry.To use the employee stock ownership plan to reduce their holdings as the case study object to explore the implementation motivation,reduce opportunity and economic consequences of Jereh’s shares.Jereh is a private leading enterprise in the oil equipment and service industry,and has frequently implemented employee stock ownership plans.By the end of 2022,Jereh has implemented nine employee stock ownership plans and reduced its holdings accordingly.Four fundamental theories form the basis of this paper: information asymmetry,signal transmission,two-factor,and sharing economy.Quantitative and qualitative analysis are blended,with the utilization of event research methods,BHAR and etc.An examination of the impetus,chance and fiscal repercussions of the diminution of Jereh’s major shareholders’ shares is to be conducted.A comparison of the economic effects of the decrease in the self-interest motivation of the majority shareholders and through the employee stock ownership plan reveals that the former will bring about negative short-term market effects,while the latter will bring about positive long-term market effects.Through the analysis of financial performance and innovation ability,the study knows that the employee stock ownership plan and the reduction of major shareholders of Jerry have a positive impact on short-term solvency growth,but have no obvious effect on profitability,which will hinder the operation ability.There is no obvious improvement in innovation ability.To analyse Jereh can not only bolster existing research theories,but also furnish some insight into the efficient reduction of majority shareholders in listed companies and the conditions for such a reduction.Investors of small and medium-sized size,aiming to protect their own interests and comprehend the double signal information of good and bad,should make rational investments and value them in the employee stock ownership plan.