Research On Equity Incentive Effects Of Listed Companies In China's Household Appliance Industry

The development of the equity incentive became a standardized process after the China Securities Regulatory Commission issued “The Equity Incentive Management Measures for Listed Companies”(For Trial Implementation) in 2006. The household appliance industry, as the main manufacturing industry in our country, began to launch equity incentive plans To follow the trend. A study was done from January 1, 2006. Until 31 st December, 2015, the number of the listed household appliance enterprise in our country has increased to 42, among which 17 companies showed the 34 equity incentive plans.Based on the background, the essay will take Haier as an example. We will analyze the design of its equity incentive plan, the implementation effect, its advantages and disadvantages aiming to provide reference in the design and implementation of equity incentive plan for other companies. The paper will be presented in five parts. The first part is a brief introduction, which mainly introduce the background, the meaning, the approach,the content and the methods of research. The second part is about the literature review and theoretical basis. In the third part, the system background and implementation status of listed companies in China's household appliance industry are introduced, which includes the analysis of the reason why the household appliance industry is suitable for the equity incentive system, the current development trend of the household appliance industry, and the present situation and problems of the equity incentive in the household appliance industry. The fourth part is about the analysis of Haier equity incentive, which takes Haier equity incentive as samples. It also analyzes its equity incentive scheme design and implementation results, evaluates the effect of Haier equity incentive, and points out the advantages and some possible problems. At last, we will put forward proposals on the incentive scheme design, enterprise external environment and internal governance structure.The fifth part is about summary and limitations.Through research, we draw the following conclusions: 1. Haier equity incentive plans have a far-reaching influence on its achievements. It significantly improves the company profitability and earning power. However, it has little effect on a company's further development. Or we can only prove that it plays as an assistant role when the environment is good. In addition, it can hardly improve a company's operation capability. 2. There may be some problems appearing in the process of implementation, such as the incentive object distribution is narrow, the incentive scale is small and performance indicators are not reasonable. What mentioned above is some representative problems in the household appliance industry, which may also be the common problems in the whole industry. In consequence, here is some advice on how to solve these problems: perfecting the scheme design of equity incentive, optimizing the enterprise internal governance structure and improving the external environment on the implementation of equity incentive. 3. Though there appeared some problems in Haier equity incentive, it is successful as a whole. Firstly,the number of the object of Haier equity incentive is becoming larger and larger. Secondly,it is helpful to make the equity moderately concentrated. Thirdly, the Haier remuneration committee plays a positive role. The last but not least, equity incentive plans are becoming more perfect.