"My goal is to have full shareholding. In the future, Huanac will be registered as a joint-stock enterprise for the whole people. I am willing to be the forerunner of the first private enterprise joint-stock pilot in China." Jia Feng, president of China Nelly Home, expressed confidence. Since its establishment 20 years ago, the equity incentive system has been implemented in Huanai Home Furnishing. This time, the elite equity system that Huanai has insisted on for more than 10 years has been reformed. Jia Feng is well aware that in China, any smart KPI assessment index is not as influential and coveted as corporate equity, and the shareholding system of all employees is like a killer mace for Huannai Lijia to save talents and retain employees to bribe employees. The success of internationally renowned enterprises such as Huawei and Alibaba is due to the establishment of a highly shared property rights mechanism from the very beginning.
Since its establishment, Huanai has implemented the equity system. Now there are many forms of shares, such as: the initial preferred stock (deposit money into the company, enjoy interest at the end of the year, most employees can join), common stock (senior executives with special contributions to the company), post option stock (manager level or above), and now more than 1,000 frontline employees have been added to the stock. Huanai formulates "rules of the game" : front-line employees who have worked in Huanai for three years will continue to be absorbed into the equity sharing system of Huanai. This is not only attractive to the employees under three years, but also equal to set the boundary of full shareholding.
In fact, foreign enterprises have gone a long way in terms of corporate profit sharing. For example, the equity incentive system came into people's view in Europe and the United States from the 1950s. So far, many large companies such as GM and Apple are implementing the equity incentive system. Jia Feng made a special research and found that few of the enterprises he came into contact with, no matter in the upstream and downstream household industry or other industries, implemented the incentive system. However, in recent years, the success of Hua Nai is closely related to the company's equity incentive system. Many entrepreneurs come to Jia Feng to discuss equity sharing and incentive system.
"The share incentive system is a very strong elastic distribution system, which is very beneficial to small and medium-sized enterprises with relatively weak profitability. In addition to the financing function, it can not only reduce the cost of enterprises, but also enhance the ability of enterprises to resist risks. Especially in the period of economic fluctuations, it can especially unite people and support enterprises to get out of difficulties and keep going upward." Jia Feng said. The reason why the cost of enterprises is reduced is that dividends do not increase the salary of employees, but the redistribution of earning more profits. The vitality stimulated by dividends can bring endless impetus to the development of enterprises, and the equity incentive plays a leverage role.
He even asserts that firms with equity incentives will destroy firms without them, because this is what people want and because of the laws of social development. The other side of the coin is that the implementation of equity incentive system also needs to avoid certain risks in advance. The employee stock ownership system, as a sharing incentive mechanism, will give a big boost to Huannai and other Chinese companies, but there are still many ways to explore.
