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Study Of Application Of EVA In Compensation Incentive Design For Managers

Posted on:2005-04-04Degree:MasterType:Thesis
Country:ChinaCandidate:Y NiFull Text:PDF
GTID:2156360125956574Subject:Business management
Abstract/Summary:PDF Full Text Request
This thesis points first out the significance of research the compensation incentive for managers. On the background of the reforming of allocation system of Stated-owned Enterprises, EVA, the index of representation of .Shareholder Value Maximization, as the managers' incentive goal, is fetched in the study of compensation incentive. Then the thesis reviews the literature of compensation incentive and the relationship between the compensation and performance, turns out the limitations of traditional financial index, and brings the concept of EVA forward. The thesis introduces the development and the application and study of EVA aboard, introduces the theory of EVA, the characteristics of EVA index by comparing the influence from EVA or traditional financial index to investment decision-making, and the management system based on EVA. The thesis analyzes the compensation system based on EVA and its strength and weakness. The part of empirical study is about the status of the intensity of compensation incentive, which chooses the samples of listed companies in the year of 2002 in China, analyzes the traits of managers' compensation and the relativity between compensation and ROE or EVA, and discusses the influence on the correlation of intensity of compensation based on EVA by some factors. The result of the empirical study indicates that company performance is positively correlative with compensation of general manager. The correlation is significance when company performance scaled by EVA. The significant correlation is also between size of company and compensation of general manager. The different proportion of state-owned shares has different influence on the correlation between compensation of general manager and EVA. The factors of whether general manger holds stock and whether general manager with plurality of the chairman of the board, and difference zone also effect the correlation between compensation of general manager and EVA. Lastly the thesis gives the advice of establishing the system of compensation based on EVA, and gives three kinds of EVA compensation incentive models for selection.
Keywords/Search Tags:EVA, Manager, Compensation, Incentive, Performance
PDF Full Text Request
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