The Research Of Manager's Motivation Based On EVA

The establishment of modern corporate system requires the separation between its ownership and management. Shareholders only determine the company's important decisions and delegate its daily operations to professional managers. This has greatly promoted the company's development, but With the dramatic advancement of science and technology and the intensification of competition in the market, the role played by managers is on the rise and they are playing increasingly important roles in the company, some problems exist inevitably, which is caused by the disaccord between the owner and the manager, by information asymmetry and unfair responsibility. Therefore, it needs an effective prompting to combine the owner's benefit with the manager's benefit, so that it can decrease the commission cost. The new-fashioned company's performance index economic value added (EVA) performed many advantages in the motivation system. It attained the consistent incentive by giving the same concern about the company's success and failure to the owner and the manager to.This paper analyzed the incentive relationship in the traditional agent model and got the compensation—performance coefficient's changed rule. It put forward this is a feedback and adjustment. Finally it would approach the optimum incentive gradually. It finished the manager's incentive by improving the interrelation between manager's compensation with the company's EVA, and combined farther EVA-the new-fashioned performance system with the manager's incentive system, designed manager's incentive system according EVA, which included bonus planning, annual salary and virtual stock incentive, at last it analyzed the advice and measurement in our country on the ground of EVA .At present, the state-owned corporation reformation is in an important period, one of the most important problems is the state-owned corporation manager's incentive. This paper designed incentive system according EVA which would have an important guidance and practice meaning to state-owned corporation and private-owned corporation.