Senior Management Incentives. Feiyue Industrial Co., Ltd. Diagnosis And Design

The incentive mechanism of managers always is the focus question concerned by domestic and international theoreticians and enterprisers, because it is the key factor of corporate governance and its effect is very important to perfect the corporate governance. And, it is concerned much more after the series scandal of Enron and WorldCom had occurred and the affairs of KMK CO.,LTD, Guangdong Yorkpoint Science & Technology CO.,LTD and GuangXia (Yinchuan) Industry CO.,LTD had been disclosed.Considering the actuality and requirement of our country's corporations in constructing the effective incentive mechanism of managers, this article investigated the incentive mechanism of managers of FeiYue Industry CO.,LTD and analyzed the connection between the incentive mechanism and the performance in the last years after summarizing the meaning, function and objective of incentive mechanism. Then, aiming at the question of FeiYue Industry CO.,LTD, this article designed a project of incentive mechanism whose core is the phantom stock option which based on the year-end profit-sharing plan for the managers of FeiYue Industry CO.,LTD. This project was expected to link the income of managers to company's performance close in order to incent the company's managers more effectively, because it combines boldly the function of the year-end profit-sharing plan which is a conventional shortdated incentive mechanism, the stock option and the phantom stock which are fashionable long-term incentive mechanism. So, its measures deserve using for reference by the relational companies of our country.