Why does China have the problem of equity division?

Institutional issues are a long story. So much so that he doesn't even like to talk about the certificate meeting, but is silently carrying out substantive operations.

Summary. Hello, glad to answer for you. Discuss why China should carry out the reform of equity division.

The fundamental reason for the reform is that China's market itself was born in the practice of reform, it is based on the guiding ideology of the market, when the market was designed, the equity of some listed companies, he will be divided into state-owned shares, corporate shares have flowed through, and made such provisions. "Expand the content: the reform of equity division is very necessary.

China's national conditions are special, and the shareholders of listed companies are divided into two types:

1。Shareholders of tradable shares (i.e., investors who buy and sell**).

2。Non-tradable shareholders (usually state-owned assets, promoters).

However, the ** of the outstanding shareholders can be listed and traded. Anything that can be ** is a tradable share.

Non-tradable shares cannot be listed for trading. That is, they hold ** but cannot be listed for trading. (China-specific).

Moreover, the proportion of shareholders of non-tradable shares in the total is close to 2 3. This leads to a situation where non-tradable shareholders are dominant, but they don't have to worry about the rise or fall of the stock price (because they can't be listed or traded). This is detrimental to the shareholders of the outstanding shares.

Discuss why China should carry out the reform of equity division.

Hello, I am inquiring for you here, please wait a while, I will reply to you immediately

Hello, glad to answer for you. Discuss why China should carry out the reform of equity division. "The fundamental reason for the reform is to call for China's market itself is born in the practice of reform, it is based on the guiding ideology of the market, when the design of the market is unprecedented, the equity of some listed companies, he will be divided into state-owned shares, corporate shares have flowed through, and made such provisions.

"Expand the content: the reform of equity division is very necessary. China's national conditions are special, and the shareholders of listed companies are divided into two types:

1。Shareholders of tradable shares (i.e., investors who buy and sell**)2. Non-tradable shareholders (usually state-owned assets, promoters) However, the ** of tradable shareholders can be listed and traded.

Anything that can be ** is a tradable share. Non-tradable shares cannot be listed for trading. That is, they hold ** but cannot be listed for trading.

China-specific situation) Moreover, the proportion of shareholders of non-Liudou Chain Qingtong shares is close to 2 3. This leads to a situation where non-tradable shareholders are dominant, but they don't have to worry about the rise or fall of the stock price (because they can't be listed or traded). This is detrimental to the shareholders of the outstanding shares.

Hope the above helps

Legal Analysis: Disadvantage 1: Free Rider; In layman's terms, it is generally referred to as "minority shareholders do not work", that is, after some employees become partners, their motivation to work not only does not increase, but weakens.

Disadvantage 2: moral hazard; The moral hazard mentioned here refers to the short-term stock price of the equity incentive object through short-term performance improvement, so as to achieve the purpose of obtaining this short-term benefit. Then we can avoid these shortcomings through rational design when designing the system.

Disadvantage 3: misalignment of interests; The purpose of the partnership system is to align everyone's interests with those of the company. However, because of people's different personalities, different abilities, different work contents, and different responsibilities, these factors will make everyone's interests misaligned.

Disadvantage 4: The attractiveness is greatly reduced; Is it useful to have a declining corporate equity incentive? Is equity in a loss-making business worth anything?

This is a very real problem. If you want to turn losses into profits through equity incentives and partnership systems, it is not impossible, but it is very difficult! Disadvantage five:

inconsistent with the company's strategy; There is no perfect governance model and management method, and what is applicable is the best! But as an entrepreneur and leader, you must understand that the shortcomings are in the first place, the risks are in the first place, how to solve or control them, and consider whether you and the enterprise can take these risks.

Legal basis

Guiding Opinions on the Reform of Equity Separation of Listed Companies》 Article 10 Adhere to the market-oriented orientation of reform, and pay attention to creating a market mechanism conducive to actively and steadily resolving the problem of equity division. According to the reform process of equity division and the overall situation of the market, the "separation between the old and the new" will be implemented at the right time, and the company will no longer distinguish between tradable shares and non-tradable shares for the first public issuance. Listed companies that have completed the reform of equity division will give priority to refinancing, and can implement management equity incentives, and at the same time reform the refinancing supervision method to improve refinancing efficiency.

The specific implementation and assessment measures for the equity incentive of the management of listed companies, as well as the supporting supervision system, shall be formulated separately by the ** regulatory department in conjunction with relevant departments. If a proposed overseas listed company involving the equity of A-shares, as well as a spin-off subsidiary of an A-share listed company intends to be listed overseas, it shall be implemented after the completion of the equity division reform. For the transfer of non-tradable shares of a listed company by agreement, it is necessary to make corresponding arrangements for the equity division reform, or to operate in combination with the company's equity division reform.