First of all, shareholders and professional managers have different positions at some time, and equity incentive is an effective way to solve the "game" between them;
Secondly, it can leave "imagination space" for professional managers, change the behavior patterns of some professional managers, turn short-term interests into long-term pursuits, and enhance their enthusiasm;
Furthermore, it has the function of spiritual encouragement and enhances the sense of belonging and identity of professional managers.
Is equity incentive good or bad?
1. In general, equity incentives are favorable and conducive to the development of enterprises.
2, but the degree of good, one is to look at the conditions of incentives, and the other is to look at the position of the stock price.
3. If the conditions of equity incentive are general, such as simple performance growth, less equity granted, low incentive price and general income.
Long-term incentive
From the perspective of employee salary structure, equity incentive is a long-term incentive. The higher the employee's position, the greater the impact on the company's performance.
In order to make the company develop continuously, shareholders generally adopt the form of long-term incentives to closely link the interests of these employees with the interests of the company, build the same interest body, reduce agency costs, and give full play to the enthusiasm and creativity of these employees, thus achieving the company's goals.
Talent value reward mechanism
The return of talents' value can not be satisfied by wages and bonuses. The effective way is to directly implement equity incentives for these talents, closely link their value return with the company's continuous value-added, and repay their contribution to enterprise development through the company's value-added.