What Are the Different Types of Economic Development Incentives?

Incentive and restraint, that is, the subject of incentive and restraint, in accordance with the goals of the organization and the rules of human behavior, in various ways to stimulate people's motivation, so that people have an inherent motivation and requirements, and enthusiasm, initiative and creativity, while regulating human Behavior, the process of moving towards the desired goal of the motivating subject.

Incentive and constraint mechanism

Incentive constraint

Incentive constraints are

Different types of enterprises have different incentives and constraints. For example, the incentives and constraints of state-owned enterprises are

Explicit and implicit incentives

Internal incentives generated by agency contracts (such as employment contracts and compensation programs) are called explicit incentives. The effective incentive that can restore the hidden facts with uncertainty to the parties and the parties to make rational choices and control is called implicit incentives, which arise from external competition mechanisms.

First, the core content of the implementation of the incentive and restraint mechanism is signed between the enterprise and the operator

The incentive and restraint mechanism is a complete set of incentive and restraint management systems based on the goal responsibility system of employees, based on the performance appraisal system, and based on the incentive and restraint system. In the incentive and restraint system, the target responsibility system is the premise and basis for the establishment and implementation of the incentive and restraint mechanism. Without performance evaluation of target responsibility, there is no basis for motivating and restricting employees. The performance appraisal system is an intermediate link between the target responsibility system and the incentive and restraint mechanism. It is the main method for scientific evaluation and confirmation of the completion of the target responsibility. It is also the prerequisite for the correct implementation of the incentive and restraint mechanism. Whether the performance appraisal system is scientific and reasonable is directly related to the evaluation and determination of the completion of the target responsibility, and also whether the entire incentive and restraint mechanism can be smoothly implemented and whether it can achieve the intended purpose. Incentive and constraint are the goals to be achieved by the target responsibility system and performance appraisal. The proper implementation of the incentive and constraint mechanism will not only promote the enthusiasm of production and operation of enterprise employees, but also regulate the behavior of employees, thereby promoting the improvement of economic and social benefits. On the contrary, improper incentives and restraints, while suppressing employees 'enthusiasm for production and operation, will also encourage employees' laziness and other behaviors that are not conducive to the development of the enterprise, thereby restricting the further development of the enterprise. In view of the above reasons, the construction of the incentive and restraint mechanism for the managers of listed companies in China can be considered from the following aspects.

(I) External environment

Foster and improve the market system, improve market regulations, and create a good external environment for the company's incentive and restraint mechanism

1. While accelerating the cultivation and improvement of systems including the lending market, property rights market, capital market, technology market, and information market, laws and regulations related to listed companies should be improved in a targeted manner, especially the Company Law and Securities Law, which provides a legal basis for the integrity management of listed companies and the incentives and constraints of business operators.

2. Strengthen external audit supervision and increase penalties for companies, intermediaries and related personnel. At the same time, the principle of strict market access and the strict implementation of Articles 57 and 58 of the "Company Law", that is, state civil servants shall not be senior management personnel of listed companies, released within a certain period of time after release from prison and have significant personal liabilities to the company's bankruptcy Directors, supervisors, managers, and directors with responsibilities or individuals with large debts are prohibited from working in other listed companies as business operators within the period prescribed by national regulations.

3. Strict law enforcement, according to the seriousness of the situation, while penalizing the company's and intermediary agencies for criminal acts, in particular, it is necessary to increase the economic punishment of the company's operators and intermediary agencies to increase the economic cost of violations and crimes , Thoroughly eradicating the soil that breeds corruption and crime, and reinventing the company's integrity management philosophy.

(II) The foundation of the company's incentive and restraint mechanism

The diversification of the company's shareholding structure and the real ownership of state-owned stocks are the basis for a sound and complete company incentive and restraint mechanism

1. The key measures to solve the vacancy of state-owned capital and to shape the truly responsible shareholders of state-owned shares are to standardize the principal-agent system, implement a reward system with clear rewards and penalties, and a system for compensation for property damage, especially for those who do not perform their duties properly, and even condone them 2. Shareholder representatives or directors who participate in illegal and criminal activities of the company's operators and cause the loss of state-owned assets and the company s interests are severely punished with severe economic, administrative and criminal penalties.

2. In accordance with the state's policy of grasping the development of large and small enterprises and doing something good and not doing something, the targeted implementation of the gradual reduction of state-owned shares is a good measure to change the beating of the company's state-owned shares and the gradual withdrawal of state-owned shares from the competition. But the key is to determine the timing, method, speed, ratio, price, and use and management of the holdings.

3. By restoring the STAQh and NET legal person stock market, providing a place for the transfer, sale, and circulation of legal person shares is also a way to gradually improve the company's equity structure. In addition, vigorous development of institutional investors, the transfer of state-owned shares and increased holdings of tradable shares through agreements are also important ways to improve the company's equity structure.

4. To prevent the unreasonable new equity from the source. For newly established companies to be issued and listed, except for the industries that the state must monopolize and control, the largest shareholders' equity in the reorganization of other companies must not exceed 50%, and exceed 50%. No approval is granted for the establishment, approval for issuance of shares and application for listing and circulation are not permitted.

(3) Important guarantees for the company's incentive and restraint mechanism

Improving the corporate governance structure and internal power checks and balances are important guarantees for the company's incentive and restraint mechanism

Really implementing the company's "three meetings and four powers" mechanism of checks and balances is a fundamental measure to improve and improve the corporate governance structure. At present, the most important task is to standardize the respective rights and responsibilities of corporate governance institutions so that they each perform their duties and responsibilities, and exercise mutual power restrictions. Resolutely implement the "five separations" of the controlling shareholder from the listed company in terms of personnel, assets, finance, organization and business, to prevent listed companies from becoming cash dispensers of the controlling shareholder; strengthen the supervision of the board of supervisors by strengthening the organizational structure, personnel and system of the board of supervisors , Audit and impeachment power, especially the company s internal audit agency directly under the leadership of the board of supervisors rather than the board or manager, is an important measure to avoid the board of supervisors once again assuming nothing; forbid the chairman of the board concurrently as the general manager or even the party secretary and the controlling shareholder legal person Representing concurrently the chairman of the company; in addition to independent directors, directors and supervisors of the company must be full-time directors and supervisors who are also managers of other companies must resign; the proportion of directors and supervisors within the company must not exceed 20% of the total number of directors; voting in related transactions At the time, strict avoidance policies were implemented.

(4) Establish and improve incentive and restraint mechanisms for responsibilities, rights, and profit teams

The asymmetry of incentives and constraints of the company's operators not only seriously damages the legitimate rights and interests of shareholders, the company and employees, but also promotes the company's irresponsible short-term, speculative, and blindness in investment decision-making. Development is full of risks. In accordance with the principles of combining responsibility, power, profit, and relative incentives and constraints, the compensation committee under the leadership of the company's independent directors should be the main body, and the relevant personnel of the company's supervisory board or external intermediary agencies should be recruited to jointly design the incentive and restraint system of the operator. The company's business operators 'responsibility, performance evaluation, and incentive constraints are organically combined and implemented on the basis of full discussion and approval by the company's employee representative meeting, and submitted to the company's shareholders' meeting for approval, so that the operators can consciously regulate their management and management behavior. On the basis of this, long-term coordinated development with the company is achieved. The evaluation and implementation of the incentive and restraint mechanism of the company's managers must also implement the principle of leading by the company's independent directors, the participation of intermediary agencies and the company's board of supervisors, in order to achieve an objective and fair evaluation and evaluation of the performance of managers, and give the managers corresponding incentives and performance based on performance. The purpose of the constraint.

(5) Public information disclosure system of listed companies

Improve and strictly implement the public information disclosure system of listed companies.

Although in accordance with the requirements of the Securities Law and other laws and regulations, listed companies need to compulsorily disclose information centered on the company's financial information, due to the imperfect corporate governance structure and serious insider control in China, the distortion of externally disclosed information is extremely serious. This makes the incentives and constraints of the operators of listed companies lack a scientific basis. Therefore, strengthening the company's requirements for the timeliness, authenticity, and accuracy of its publicly disclosed information is not only a requirement for the company to implement an incentive and restraint system, but also a need for the company's long-term healthy development. The company should first establish a strict review, risk prevention and accountability system for information disclosure, and try to prevent the production and dissemination of false information. At the same time, the state should, based on the false disclosure of information and the extent of the loss of benefits to companies and stakeholders, punish listed companies and related intermediaries, and more importantly, increase their participation in false information disclosure. The listed company's directors, managers, supervisors and intermediary personnel's financial penalties and civil compensation liability are attached, and administrative and criminal penalties are attached to achieve the purpose of deterring criminal offenders from using false information as a means to engage in malpractice and harm public welfare.