Study On Application Of EVA In Manager Reward Motivation

EVA is defined as an index to evaluate the true performance of the enterprise. It is also a set of synthesis management system which brings effect to internal aspects of the enterprise . EVA can indicate the resource and approach of wealth creation more easily than traditional f'inanciai assessment indexes because of its compensation concept on the cost of capital and its accounting adjustment, . How to embody the basic concepts of EVA in management? How to keep creating wealth for stockholders? The author think it is essential to motive the very important persons who have great effect on EVA. The managers who really control the enterprises are definitely those persons. If we can use EVA to decide managers' reward which is attached directly with the enterprise' operating results based on EVA, the managers will became quasi-owner of the enterprise. In that case, those managers will be motivated by themselves and make benefits for stockholders on behalf of their benefits.The paper explain the basic concepts of EVA firstly, then discuss some practical problems concerning EVA measuring process. The author come up with own simple thourght after provoking the key factor of the cost of equality capital in private enterprises. The above mentioned factors are all preconditions. The paper define the major aspects of the managers reward motivation system when finished the discussion about the managers reward system based on EVA. Gathering existent theory and practical production , an operable design about EVA phantom stock planning is putted forward. At the end of the paper, the author reduce some general problems about carrying out EVA to motivation manager's in Chinese enterprises through thinking over the EVA indexes and EVA managers reward motivation system.