Research On The Implementation Effect Of Equity Incentive In Dongfang Tong Company

With the escalation of market competition,the implementation of equity incentives is being widely used,which not only can resolve the principal-agent problem effectively,but also attract more excellent employees.Through the implementation of equity incentives,the management can share the business risks and profits with the employees,and finally achieve a win-win situation.Therefore,many enterprises regard equity incentives as an effective strategy to effectively solve the problem of principal-agent.In recent years,due to the continuous improvement of relevant regulation system in China,many companies have been adopting equity incentive system,however,in the actual management,there is a big gap between different corporations on the effect of the equity incentive.Therefore,this paper selects Orientone,a software and information technology service sector company,as the research object,analyzes and discusses the effect of the implemented equity incentive in Orientone,analyzes its impact on the company’s economic performance and its active significance,points out the shortcomings,and puts forward the suggestions to improve the equity incentive plan according to the development situation of the company.The article firstly describes the background,purpose and significance of equity incentive research,and reviews in detail the research literature on the effect of equity incentive implementation at home and abroad;secondly,it introduces in detail the concepts and basic theories of equity incentive,organizes the main contents of the equity incentive program of Dongfang Tong,and briefly describes the current situation of the company,the equity structure and the financial situation of the company.The results of the study confirm that the equity incentives have improved the long-term business performance of the case company and helped the company to better attract and retain the excellent core talents,thus enhancing the market competitiveness of the company.However,there are shortcomings in the process of implementing the equity incentive plan of the company: the equity incentive target is set too high,the information disclosed in the equity incentive plan is defective,and the equity incentive evaluation index is single.Finally,in view of these shortcomings,the article puts forward five suggestions,namely,setting reasonable exercise conditions,comprehensive disclosure of equity incentive plan,enriching equity incentive methods,setting reserved shares and implementing a continuous equity incentive plan,so that Dongfang Tong can think about and improve the shortcomings of the equity incentive plan in practice.This paper hopes to provide help for the company’s later equity incentive plan and development,and also provide some reference and reference for other companies implementing equity incentive.