Research status of equity incentive of listed companies at home and abroad

The large-scale implementation of equity incentive in domestic listed companies began in 2005, and the reform of non-tradable shares was fully launched. Some listed companies combine equity incentive with non-tradable share reform, mainly by transferring shares through non-tradable shareholders. After the CSRC issued the Administrative Measures for Equity Incentive of Listed Companies (Trial), more listed companies carried out equity incentive. Due to the low share price at that time, most companies adopted stock options, which benefited the management of many listed companies. However, around 2007, the stock price rose sharply, and the incentive amount brought by stock options became very limited, and even the exercise conditions might not be available. Therefore, some listed companies have introduced restricted stock incentives.

At present, affected by the financial crisis, although the stock price has fallen sharply, it seems that it is more qualified to implement equity incentive, but in fact, the premise of realizing equity incentive is to meet the performance requirements, which is difficult for most listed companies to achieve in the current economic environment. The general requirements of the regulatory authorities for performance indicators are: performance indicators (such as earnings per share, weighted return on net assets and net profit growth rate, etc. After the implementation of equity incentives, it should not be lower than the historical level; During the stock option waiting period or restricted stock lock-up period, the net profit attributable to shareholders of listed companies in each year and the net profit after deducting non-recurring gains and losses shall not be lower than the average level of the last three fiscal years before the grant date and shall not be negative; Option cost should be included in the current profit and loss. In the first half of 2006-2008, most industries were at a cyclical high, and the profit level was also at a high level. However, it began to decline in the second half of 2008, and now it is at a low level, so it is difficult to meet the requirements of equity incentive in performance. With the improvement of corporate governance structure of listed companies, the dispersion of equity of listed companies in the full circulation market environment, and the general acceptance of the concept of maximizing shareholder value, equity incentive will be implemented and developed in a wider range in the future.