Abstract: Taking the employee stock ownership plan of China’s A-share listed companies from January 2014 to August 2017 as samples, this paper analyzes the causes and mitigation mechanisms of the insufficient earnings from the employee stock ownership plan from the perspectives of stock liquidity and institutional investors’ field surveys. The results show that the employee stock ownership plan does have the problem of insufficient earnings, and lacking of stock liquidity would intensify the problem of insufficient earnings from the employee stock ownership plan. Ii is found through further study that the field survey done by institutional investors can alleviate the problem of insufficient earnings from the employee stock ownership plan. It is also found through further subdivision of the institutional investors types that the field surveys done by private placement, brokers, overseas qualified investors and other types of institutional investors can better mitigated the problem of insufficient earnings from the employee stock ownership plan.

Key words: employee stock ownership plan, insufficient earnings, stock liquidity, field survey of institutional investors