Is equity incentive really useful, and is equity incentive good?

Equity incentive refers to a system in which an enterprise gives a certain amount of enterprise equity to the enterprise operator in a specific way under certain conditions (**). It can effectively combine the short-term and long-term interests of the enterprise, so that the business operator can think about the development of the enterprise from the perspective of the owner, so as to achieve the win-win goal of the common improvement of the income of the owner and the operator. So, in this sense, the stock price falling below the equity incentive exercise price means a higher margin of safety, and I wish you success in your investment.

Equity incentive is an incentive measure for a certain range of employees such as the company's management and core technical team to carry out shares or options, in order to motivate them to work harder, improve the company's efficiency, and achieve the purpose of improving shareholder returns. The issuance of equity incentives can make the interests of employees more closely linked with the interests of the rest of the company, promote employees to actively create value, and thus promote the long-term development of the company. It can be seen that equity incentives are beneficial to the long-term development of the company.

As an employee incentive method, equity incentive is conducive to improving employees' sense of responsibility and belonging, thereby reducing the turnover rate of employees. In addition, equity incentives can also promote communication and collaboration within the company, strengthen cooperation between departments, enhance the mobility of talents, realize the sharing and optimization of resources, and improve the overall efficiency of the enterprise, which are extremely beneficial aspects of equity incentives for the long-term development of enterprises. However, there are also disadvantages to equity incentives, such as the incentive target is difficult to quantify, there are certain costs and risks, improper equity distribution and other problems, which require enterprises to have a scientific and reasonable system to standardize.

For the implementation of the incentive system and the design of the equity incentive policy, the strategic direction, corporate culture, employee needs, shareholder interests and other factors should be considered, the system should be streamlined, the system should be standardized, the fraud should be avoided, and a reasonable assessment mechanism and management system should be established to ensure the effective implementation of the equity incentive.

To sum up, equity incentives, as an employee incentive method, are beneficial for the long-term development of the company. However, it is necessary to pay attention to rationality and standardization in the implementation, and formulate appropriate policies and systems to ensure that the equity incentive plays an ideal role. <>

Equity incentives are positive. Equity incentives can bring asset returns to employees, improve employees' active work, and improve work efficiency. However, the company's acquisition of equity incentives for employees must be carried out in accordance with the law, and must be resolved by more than two-thirds of the directors present at the board meeting.

1. Individual income tax policy for equity incentives.

Equity incentive refers to the company's long-term incentive to its directors, senior managers and other employees with the company's ** or equity as the target. In practice, equity incentives have increasingly become an important means for companies to improve economic efficiency, retain and motivate core employees, which mainly include specific types such as equity options, options, restrictive rights, equity awards, and value-added rights.

2. Under what circumstances can equity repurchase be carried out?

The circumstances under which the company can repurchase shares are: (1) reducing the registered capital of the company; (2) merger with other companies holding shares of the Company; (3) Using shares for employee stock ownership plans or equity incentives; (4) The shareholders are suspicious of the resolution on the merger and division of the company made by the Shandong General Assembly of the shares, and request the company to acquire its shares; (5) The shares are used to convert the corporate bonds issued by the listed company that can be converted into **; (6) The listed company maintains the value of the company and the rights and interests of shareholders.

3. How to distribute joint-stock companies.

The distribution of equity by a joint-stock company shall be carried out in a unified manner in accordance with the relevant principles and methods, and the proportion of each person's capital contribution and the proportion of dividends in the future shall be specified in the articles of association and contract. It is necessary to clearly state to avoid future disputes, to have a clear hierarchy to facilitate better management in the future, and the company should have a leader and leave a part of the shares as an incentive for employees. The method of capital contribution and the proportion of equity should be specified in the contract.

Article 4 of the Company Law of the People's Republic of China.

The shareholders of the company enjoy the rights of asset returns, participation in major decision-making and selection of managers in accordance with the law.

Article 142.

The Company shall not acquire the shares of the Company. However, this does not apply in any of the following circumstances:

1) Reduce the registered capital of the company;

(2) merger with other companies holding shares of the Company; (3) Using shares for employee stock ownership plans or equity incentives;

4) Shareholders request the company to acquire their shares because they disagree with the resolution of the general meeting of shareholders to merge or divide the company;

(5) The shares are used to convert the corporate bonds issued by the listed company that can be converted into **;

6) It is necessary for the listed company to maintain the value of the company and the rights and interests of shareholders. If the company acquires the shares of the company due to the circumstances specified in items (1) and (2) of the preceding paragraph, it shall be resolved by the general meeting of shareholders; If the company acquires the shares of the company due to the circumstances specified in subparagraphs (3), (5) and (6) of the preceding paragraph, it may be resolved by a meeting of the board of directors attended by more than two-thirds of the directors in accordance with the provisions of the articles of association or the authorization of the general meeting of shareholders.

Equity incentive specifically refers to the fact that the company gives certain shareholder rights and interests to the object of the incentive, so as to realize the incentive effect on employees and connect them with the company as a community of interests.

Generally speaking, the implementation of the equity incentive plan is good news for the company, whether it is in the form of restrictive **, gifted to employees or subsidized employee purchases, etc., it will have a certain positive impact on the company, but on the whole, the impact is not obvious, but the positive impact of subsidizing employees to buy the company is the greatest.

If the municipal company begins to implement the equity incentive plan, on the one hand, the plan itself will have a beneficial effect on the company's operation, and on the other hand, it shows that the company is optimistic about its own form in the future, so the equity incentive plan generally has a positive impact. However, after the implementation of the equity incentive plan, the stock price may also be **, so it is still necessary to be cautious in investment**.

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

Peculiarity. 1. Long-term incentives.

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

2. The return mechanism of talent value.

The effective way is to directly implement equity incentives for these talents, closely link their value returns with the company's continuous value-added, and repay these talents for their contributions to the development of the enterprise through the company's value-added.

3. Company control incentives.

Through equity incentives, employees participate in decision-making related to the development and operation of the company, so that after they have part of the company's control, they not only pay attention to the company's short-term performance, but also pay more attention to the company's long-term development, and are truly responsible for it.

Key points. 1. Selection of incentive mode.

The incentive model is the core issue of equity incentives, which directly determines the effectiveness of incentives.

2. Determination of incentive objects.

Equity incentive is to motivate employees, balance the long-term goals and short-term goals of the enterprise, especially pay attention to the long-term development and the realization of the strategic goals of the enterprise, therefore, the determination of the incentive object must be guided by the strategic goals of the enterprise, that is, the selection of the most valuable personnel to the enterprise strategy.

3. ** of stock purchase funds.

Since the target of encouragement is natural persons, the ** of funds becomes a key point in the whole planning process.

4. Design of assessment indicators.

The exercise of equity incentives must be linked to performance, one of which is the overall performance condition of the enterprise, and the other is the individual performance assessment index.

Equity incentive refers to the mechanism of long-term incentives for employees implemented by enterprises in order to motivate and retain core talents. And equity incentives generally include options and value-added rights. **Option refers to the right granted by a listed company to an incentive object to purchase a certain amount of the company within a certain period of time in the future with predetermined ** and conditions.

[Legal basis].Article 3 of the Trial Measures for the Implementation of Equity Incentives by State-Controlled Listed Companies (Overseas).

The term "equity incentive" in these measures mainly refers to equity incentive methods such as options and value-added rights.

**Option refers to the right granted by a listed company to an incentive object to purchase a certain amount of the company within a certain period of time in the future with predetermined ** and conditions. **In principle, options are applicable to overseas listed companies registered overseas and controlled by state. The equity incentive recipient has the right to exercise this right and also has the right to waive this right.

**Options may not be transferred and used as collateral, repayment of debts, etc.

**Value-added right refers to the right granted by the listed company to the incentive object to obtain the income brought by the specified amount of **** increase in a certain period of time and conditions. **The right to increase in value is mainly applicable to companies that issue foreign shares listed overseas. The equity incentive recipient does not have the ownership of these **, nor does it have shareholder voting rights and allotment rights.

**The right to increase value cannot be transferred and used for security, repayment of debts, etc.

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

Equity incentives are mainly used to give employees part of their shareholders' rights and interests conditionally, so that they have a sense of ownership, so as to form a community of interests with the enterprise, promote the common growth of the enterprise and employees, and help the enterprise achieve the long-term goal of stable development.