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Congratulations on the completion of the equity incentive system

Views: 0     Author: Site Editor     Publish Time: 2021-12-31      Origin: Site

To the interests of employees and the company closely linked together, set up the staff awareness, promote the company and employees grow together, to form a community of interests with the enterprise, fully effective play enthusiasm and creativity of the staff, help the company stable development, so as to realize the company's long-term development goals, December 13 to 17, Our company hired professionals to conduct a 5-day equity incentive training for the company's leadership and core employees.

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Equity incentive, also known as option incentive, is a long-term incentive mechanism implemented by enterprises in order to motivate and retain core talents, and is one of the most commonly used ways to motivate employees.

Equity incentive is an incentive method that gives managers certain economic rights in the form of equity, so that they can participate in corporate decision-making, share profits and bear risks as shareholders, so as to serve the long-term development of the company diligently and responsibly.

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1.      Characteristics of equity incentive

1)      Long-term incentives

From the perspective of employee compensation structure, equity incentive is a kind of long-term incentive, the higher the employee's position, the greater the impact on the company's performance.In order to enable the sustainable development of the company, shareholders generally adopt the form of long-term incentives to closely link the interests of these employees with those of the company, build a community of interests, reduce agency costs, and give full play to the enthusiasm and creativity of these employees, so as to achieve the company's goals.

2)      Reward mechanism of talent value

The value return of talents cannot be satisfied with salary and bonus. The effective way is to directly implement equity incentive for these talents, and closely link their value return with the continuous appreciation of the company, so as to return the contribution of these talents to the development of the company through the appreciation of the company.

3)      Corporate control incentive

Through equity incentive, employees can participate in the decision-making of enterprise development, operation and management. With partial control of the company, employees can not only pay attention to the short-term performance of the company, but also pay more attention to the long-term development of the company and be truly responsible for it.

2.      Value of equity incentives

1)      For unlisted companies

Equity incentive is beneficial to relieve the pressure of compensation faced by the company.As the vast majority of unlisted companies are small and medium-sized enterprises, they generally face the problem of capital shortage.Therefore, by means of equity incentive, the company can appropriately reduce operating costs and cash outflow. At the same time, it can also improve the company's business performance and retain the core talents with high performance and strong ability.

2)      For the existing shareholders

The implementation of equity incentive is beneficial to reduce the moral hazard of professional managers, so as to realize the separation of ownership and management.Unlisted companies tend to have one dominant share, and their ownership and management rights are highly unified, leading to the "three hui" system in many cases in name only. With the development and expansion of the enterprise, the management right of the company will be gradually transferred to professional managers. Since the goals pursued by shareholders and managers are inconsistent, there exists "moral hazard" between shareholders and managers, and incentive and restraint mechanisms are needed to guide and restrict managers' behaviors.

3)      For employees of the company

Equity incentive is beneficial to stimulate the enthusiasm of employees and realize their own value.One of the biggest problems facing smes is the flow of talents. Due to the treatment gap, many smes find it difficult to attract and retain high-quality management and research personnel. Practice has proved that after the implementation of equity incentive plan, because the long-term value of employees can be reflected through equity incentive, employees' enthusiasm for work will be greatly improved. Meanwhile, due to the restraint of equity incentive, employees' loyalty to the company will also be enhanced.

3.      The role of equity incentive

1)      Establish a community of interests for enterprises

The result of equity incentive is to make the managers and key technical personnel become the shareholders of the enterprise, and their personal interests tend to be consistent with the interests of the company, so the contradiction between them is effectively weakened, and the community of corporate interests is formed.

2)      Performance incentive

After employees become shareholders of the company, they can share the high profits brought by high-risk operation, which is conducive to stimulating its potential. This will encourage operators to boldly carry out technological innovation and management innovation and adopt all kinds of new technologies to reduce costs, thus improving the business performance and core competitiveness of enterprises.

3)      Restrain the short-sighted behavior of managers

After the introduction of equity incentive, the assessment of corporate performance will not only focus on the financial data of the current year, but also pay more attention to the company's future value creation ability. In addition, as a kind of long-term incentive mechanism, equity incentive can not only to properly reward operators during his tenure, and part of the reward is in the office after the extension, which requires the operator not only care about how to improve the performance during his tenure, but also pay close attention to the long-term development of the enterprise, in order to make sure get his deferred income, This can further weaken the short-term behavior of operators, and is more conducive to improve the ability of creating value in the future and long-term competitiveness of enterprises.

4)      Retain and attract talents

The implementation of equity incentive plans in unlisted companies is conducive to stabilizing enterprises and attracting excellent managerial and technical talents.In addition, equity incentive system is a powerful weapon for enterprises to attract excellent talents.Since the equity incentive mechanism is not only for the company's existing employees, but also the company reserves the same incentive conditions for attracting new employees in the future, such commitment brings strong interest expectations to new employees, which is quite attractive and can gather a large number of excellent talents.

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Through the 5-day equity incentive, all the managers and core staff who attended the conference got equity certificates, which enhanced the sense of belonging and identity of employees and stimulated their enthusiasm and creativity. I believe that with your efforts, the company will be thriving and developing.


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  : +86 29 86033971
 : +86 29 86033972
  :  zhao.wanbao@dcsxsm.com
  : The Innovation Industrial Park, No.36, Jingwei Road ,Xi'an Economic and Technological Development Zone,Xi'an City,Shaanxi Province,China
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