| Summary: | In the framework of modern enterprise system, the “principal-agent” relationship between the shareholders and the proprietor is clear in terms of property rights and responsibilities, but there is also a factor that the proprietor is driven by short-term personal interests against the long-term interests of the enterprise. As a kind of innovation in corporate governance, the equity incentives enable the proprietors to hold a certain amount of equity in the enterprise, so that proprietors can directly obtain the growth return of the enterprise while exercising the management right of the enterprise, and then consider the long-term development of the enterprise from the perspective of enterprise development.
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