One person can go faster, but a group of people can go further. Talent is the most critical element of enterprise development. Finding talent, retaining talent, and using good people are the key strategies for the development of every enterprise. It is difficult for enterprises without talent strategy to achieve sustainable development. However, with the rapid development of society, the values of talents have changed; The effective compensation method for a long time is no longer the most important factor to motivate talents, let alone to retain outstanding talents for a long time. Compared with traditional compensation methods, equity incentive changes the simple employment relationship, gives talents a stronger sense of belonging and achievement, meets the deeper needs of the incentive object, greatly mobilizes the enthusiasm and initiative of the incentive object, and can better realize the win-win situation of enterprise development and talent development. In the current enterprise management, equity incentive has become an important way to attract and retain talents. Because of this, many enterprises in our country are planning or promoting equity incentive matters. Enterprise equity incentive involves many problems such as enterprise operation, human resource management, law, tax and so on. Specifically, it also involves the system design of incentive object, incentive path, incentive platform, incentive tool, incentive equity source, incentive equity price, incentive condition, etc. Many enterprises have only a partial understanding of equity incentive, which causes practical obstacles to the implementation of equity incentive. How should enterprises promote equity incentive? Based on the practical experience of corporate equity incentive legal services, we put forward a three-step equity incentive idea of "fixed person, quantitative and fixed plan" from the full perspective of limited liability company operation and law. The practical effect is good and operators can refer to it. It should be pointed out that: this paper mainly discusses the issue of equity incentive of limited liability company in China; Based on the particularity of equity incentive in joint-stock companies and state-owned enterprises, this paper will not discuss.

     The first step is to define people, that is, the enterprise determines the scope of candidates for incentive objects.Determining the appropriate scope of incentive object is the first problem to be considered in the enterprise equity incentive. The key of enterprise equity incentive is to motivate the employees who should be motivated. The success or failure of equity incentive is largely determined by the reasonable determination of the scope of equity incentive objects. In the practice of enterprise equity incentive, the object of most enterprise equity incentive is directly determined by the founder team according to the comprehensive factors such as the position, contribution, length of service and ability of the employee. When determining the target of incentive, enterprises should not only consider the current contribution of employees, but also consider the future strategic needs of enterprises from the perspective of future development. Specifically, enterprises can determine the scope of incentive objects by referring to the following principles: (1) Employee contribution, that is, whether employees have made very important contributions to the development of enterprises in the history, and equity incentive should reward employees who have made significant contributions to the enterprise. (2) Staff quality and ability, equity incentive should motivate employees who have made significant contributions in history, but also encourage employees with high comprehensive quality and potential for future development. Therefore, enterprise equity incentive should also consider the quality and ability of employees, so as to explore and reserve talents for the future of the enterprise. (3) Employee loyalty, the importance of employee loyalty in the process of enterprise development is no less than the quality and ability of employees; The ability to have no loyalty can even cause great harm to the enterprise sometimes. In equity incentive, enterprises can evaluate the loyalty of employees from the aspects of working time and personal character, so as to motivate employees with high loyalty. (4) Post value: Different positions have different values to the enterprise. In the process of equity incentive, key and important positions should be identified and encouraged accordingly, and the key talents in key positions should be encouraged to create greater value for the company. When enterprises determine the object of equity incentive, they should avoid the extreme phenomenon of "everyone holding shares" and "very few people holding shares".

    The second step is quantitative, that is, to determine the number of equity incentives.The quantity of equity incentive affects the effect of equity incentive to a great extent. If the number of equity incentives is too large, it will affect the founder's control over the enterprise. If the number of equity incentives is too small, the expected incentive effect cannot be achieved. From the quantitative point of view, it can be divided into two dimensions: the determination of the total amount of equity incentive and the determination of the specific number of incentive objects. The total amount of equity incentive refers to the size of the enterprise equity incentive pool, which usually depends on many factors such as the founder's sharing spirit, the development stage of the enterprise, and the company's salary level, and there is no uniform standard. It is generally between 10% and 20%. The specific number of equity incentive objects refers to the number of individual equity shares allocated to each equity incentive object. When determining the number of equity of each incentive object, we should not only consider the total amount of equity incentive, but also prepare to grasp the psychological expectations of the incentive object, taking into account the present and future, so that equity incentive can really play the role of rewarding contributions and motivating talents. In the practice of enterprise equity incentive, there are two methods to determine the specific equity quantity of incentive object: direct allocation and quantitative allocation. The so-called direct allocation means that the founder of the company directly determines the amount of equity allocation of the incentive object according to his personal judgment. This method is direct and efficient, and is suitable for enterprises with small scale and small number of people. The so-called quantitative distribution means that the company sets KPI indicators and corresponding coefficients, the enterprise conducts quantitative assessment on each incentive object, and then determines the individual coefficient of the incentive object in the total stock incentive according to the proportional relationship between the assessment results of each incentive object and the sum of the assessment results of all incentive objects of the enterprise. The quantitative distribution method is usually carried out through the steps of KPI assessment index modeling, individual assessment calculation, assessment calculation of all incentive objects, determination of individual coefficient and determination of individual equity incentive quantity. Compared with the direct allocation method, the quantitative allocation method can evaluate the incentive object more comprehensively and accurately, and avoid the disadvantages of one-sided evaluation caused by personal subjective factors, which is the most used method in practice.

     The third step is to determine the plan, that is, after determining the object and quantity of equity incentive, the enterprise determines the specific plan of equity incentive.Equity incentive scheme involves the design of equity incentive tool, equity incentive path, equity incentive platform, equity incentive source, equity incentive price, equity incentive condition, equity locking mechanism, equity withdrawal mechanism and so on. Among them, equity incentive tool, equity incentive path and equity incentive platform are the three most critical elements in equity incentive scheme, and also the three key issues that enterprises must identify and think about when implementing equity incentive. The details are as follows:

(1) Equity incentive tools. In the practice of equity incentive, the tools of equity incentive usually include restricted equity, equity option, virtual equity, dividend right, stock appreciation right, incentive fund and so on. Restricted stock incentive, stock option incentive and virtual stock incentive are the three most common stock incentive tools. (1) Restricted equity means that the enterprise grants specific shares of equity to the incentive object in accordance with the conditions stipulated in the equity incentive plan, but the incentive object is restricted in the transfer of some rights such as the company's equity obtained based on the incentive plan. In essence, restricted shares give the incentive object the equity of the company, but also make certain restrictions on the transfer of the equity held by the incentive object, set a guarantee and other disposal behaviors. When the set conditions are not achieved, the incentive object shall not transfer the equity acquired by it and other disposal behaviors. "Give first and then restrict" is one of the main characteristics of restricted stock incentive. Restricted stock incentive has the dual effect of reward and incentive. In practice, it is more applicable to the old employees who have made outstanding contributions to the company. In the case of introducing talents or motivating new employees, the restricted stock incentive model is usually less applicable. (2) Equity option is the right granted by the enterprise to the incentive object of the company to purchase a certain number of shares of the company within a certain period of time in the future under predetermined conditions. Equity option incentive does not directly give equity when implementing equity incentive, but promises to give a certain amount of equity in the company when the preset conditions are fulfilled in the future. "Promise first and give later" is one of the characteristics of equity option incentive. Equity option is a kind of right to expect the future, is a kind of right to become a shareholder in the future. The consideration of equity option incentive is mainly to encourage key employees to grow together with the company and create greater value for the company in the future. Stock option incentive can not reward the old employees who have made outstanding contributions, but is more suitable for introducing new employees or encouraging employees to create greater value for the company in the future. (3) Virtual equity incentive means that the company grants a virtual equity to the incentive object, and the incentive object can enjoy a certain amount of dividend rights accordingly. However, the incentive object is not a shareholder in the real sense of the company, and does not enjoy ownership, voting rights, transfer rights, inheritance rights and other shareholder rights. Virtual equity is essentially a dividend right, not equity. Compared with restricted equity incentive and equity option incentive, virtual equity incentive grants "virtual" equity to the incentive object. When the company achieves the performance target, the incentive object can enjoy a certain amount of dividends accordingly, and does not enjoy ownership, voting rights, inheritance rights and other shareholder rights, and does not need to register as a shareholder in the industrial and commercial or Chinese companies, and the operation is the most flexible. Virtual equity is easy to operate, does not change the ownership structure of the company, and does not need to consider the source of incentive equity. However, because the incentive object does not enjoy the ownership, voting rights, inheritance rights and other shareholder rights under this incentive model, the incentive effect on employees is weak. In addition, due to the large cash expenditure of enterprises for incentive, it will affect the cash flow of enterprises. After all, not all enterprises can ensure sustained high growth and high profits, which puts forward certain financial requirements for enterprises to implement virtual equity incentive. In practice, virtual equity incentive is mostly used for enterprises with good cash flow to encourage sales and other front-end personnel in a timely manner. This model can not only be well linked to the performance of incentive objects, but also flexibly allow incentive objects to share business performance in the first time, and the incentive effect is outstanding.

(2) Equity incentive path. In the practice of enterprise equity incentive, there are many kinds of equity incentive ways, such as direct shareholding, indirect shareholding, entrustment holding, trust plan, etc. Direct holding, indirect holding and holding on behalf of shares are the three most common holding modes in the equity incentive model. (1) Direct shareholding means that when the incentive party implements the equity incentive, it directly grants the incentive object the equity of the incentive party, and the incentive object is directly registered as the incentive shareholder and enjoys the rights of the shareholder. The advantages of direct shareholding are as follows: employees directly register as shareholders of the company, employees will have a stronger sense of security, incentive effect is good; Employees directly hold the equity of the incentive party, and when the company achieves IPO, the incentive object can directly sell shares in the secondary market after the lifting of the ban, and the exit path is convenient; The incentive object may apply the deferred tax policy stipulated by the Ministry of Finance and the State Administration of Taxation No. 101. Eligible equity incentive employees may not pay tax when they obtain the incentive equity and defer the tax payment until the transfer of the equity. However, the direct shareholding method also has disadvantages, such as limited by the upper limit of 50 shareholders and employee mobility, which will affect the stability of the company's equity structure. In particular, when labor relations change, employees are required to cooperate in handling the shareholder change procedures. If employees have disputes with the company over the issue of equity change, or employees do not cooperate in handling the corresponding shareholder change procedures, the company needs to solve the disputes through litigation, arbitration and other means, which will bring great uncertainty to the ownership structure of the incentive party. (2) Indirect shareholding means that the incentive party does not directly grant the incentive party's equity when implementing the equity incentive, but grants the incentive object a certain amount of equity or enterprise equity of the incentive platform through the establishment of an incentive platform. Compared with direct shareholding, the incentive object is not the incentive shareholder, but the incentive platform shareholder or partner. The incentive object indirectly enjoys the benefits of the incentive party through the incentive platform, so it is called indirect shareholding. In the indirect shareholding mode, the incentive object is directly registered as the shareholder or partner of the incentive platform, but it is not directly registered as the shareholder of the incentive party, nor does it directly enjoy the shareholder rights of the incentive party, so the risk is well isolated. Compared with the direct shareholding mode, indirect shareholding mode can not only motivate employees well, but also isolate the risks of equity incentive well, taking into account the needs of both operation and law. In the practice of equity incentive, indirect shareholding mode is a mainstream shareholding mode, and enterprises can give priority to it when determining the equity incentive plan. Of course, in the indirect equity incentive scheme, the limited exit path of the incentive party is a great challenge, and it needs to be planned in advance. (3) Equity entrustment means that employees do not directly hold the equity of the incentive party, nor do they hold the equity of the incentive party through the incentive platform, but entrust others to hold the equity of the incentive party or hold the equity or equity of the incentive platform on behalf of others. Under the equity entrusting mode, employees are not registered as the shareholders of the incentive party, nor as the shareholders or partners of the incentive platform, but only enjoy the corresponding rights and interests of the agent through the agreement relationship with the agent. The share holding model is a contractual legal relationship based on the share holding agreement. Due to the relativity and uncertainty of the contract, whether employees are willing to let others hold the equity of the company depends on the trust of employees to the trustee to a large extent, and employees generally have a poor sense of security. In the practice of equity incentive, most employees do not like the equity holding model.

(3) Equity incentive platform. As mentioned above, the equity incentive path of indirect shareholding can not only motivate employees well, but also isolate legal risks such as unstable equity structure, taking into account the needs of both operation and law. In terms of the equity incentive path of indirect shareholding, enterprises usually set up shareholding platform first, and then implement equity incentive plan through shareholding platform. There are many forms of enterprises in our country, such as companies, partnerships, individual industrial and commercial enterprises, and sole proprietorship enterprises. Limited liability companies or partnerships are two types of businesses commonly used in incentive platforms. A limited liability company is established by a shareholder in the form of capital contribution in accordance with the provisions of the Company Law, and is liable to the company within the limit of the amount of capital contribution it has subscribed to. An enterprise legal person whose company is liable for the debts of the company with all its independent legal person property; The company has an independent legal personality and operates in accordance with the Company Law and the articles of Association. A partnership enterprise refers to a for-profit organization in which partners, in accordance with the provisions of the Partnership Enterprise Law, enter into a partnership agreement, make joint capital contribution, operate jointly, share benefits and share risks; A partnership does not have the status of an independent legal person and operates in accordance with the Partnership Law and the partnership agreement. From the perspective of business operation, partnership has advantages in terms of operating flexibility and tax burden cost. In terms of the standardization of corporate governance and the feasibility of capital operation, the type of limited liability company has advantages, and the vast majority of enterprises adopt the type of limited liability company in business practice. In terms of equity incentive platform, is it limited liability company type or partnership type? It is necessary for enterprises to comprehensively consider the operation positioning of incentive platform, capital operation planning and tax burden cost. If the equity incentive platform is positioned for the pure purpose of equity incentive, and no other substantive business is carried out in the later stage, and there is no capital operation plan, the equity incentive platform should choose the type of partnership enterprise, because the partnership enterprise management is flexible and the tax burden is low. If the positioning of the equity incentive platform is not only the purpose of equity incentive, but also to carry out other substantive business, or there is a plan to carry out capital operation, the equity incentive platform should choose the type of company, because the corporate form can better meet the needs of the above business operation. In short, there is no good difference between the form of limited liability company and the form of partnership. The type of incentive used in the practice of equity incentive depends on the positioning of the incentive platform, the operation needs of the incentive and the planning of the exit path of the incentive object.

Based on the above three-step thinking of "fixed person, quantitative and fixed plan", I believe that many enterprises have a basic clear understanding of equity incentive. However, enterprises should pay attention to the following issues in equity incentive: (1) Equity incentive should be suitable for the actual situation of enterprises. Suitable is the best, each equity incentive scheme has its advantages, but also has its disadvantages, metaphysically to talk about the advantages and disadvantages of equity incentive scheme is inappropriate. Good and bad does not depend on the program itself, but depends on the business needs of the enterprise, depends on the actual situation of the incentive object. When determining the equity incentive scheme, enterprises should conduct comprehensive assessment from multiple perspectives such as operation, management, law and tax burden to determine the most suitable incentive scheme for actual business needs, and avoid metaphysical imitation of others' incentive scheme. (2) Equity incentives should prevent the lazy effect. The fundamental purpose of enterprise equity incentive is to achieve a win-win situation between the enterprise and the incentive object through equity incentive. However, if the enterprise equity incentive is improper, the incentive object may not think about making progress after equity incentive, which will have a negative impact on the enterprise and other incentive object products. In order to prevent the phenomenon of lazy people in equity incentives, enterprises should carry out corresponding system design in advance, such as phased exercise, phased maturity, equity locking, equity buyback and other system design, to ensure that the incentive object has expectations for incentive returns, but not a small wealth. It should be pointed out that: on the one hand, equity incentive greatly affects the realization of enterprise development strategy; On the other hand, equity incentive is a highly professional matter, enterprises based on the above "fixed person, quantitative and fixed plan" three-step thinking can basically understand equity incentive, but the specific equity incentive system design is still recommended that enterprises hire professionals to give guidance and assistance, in order to achieve twice the result with half the effort.