The Analysis Of Jingshan Machine MBO On Its Declining Performance

Because of the salary incentive and stock option incentive for the shortage of the management incentive, Management Buy-Out arises at the historic moment, achieving the unity of ownership and management, management's control and residual claims. Originated in the west,it springs up in equity division reform in our country,and twists in the dispute and rectification.It also helps to reduce agency cost, play an entrepreneurial spirit, and have a tax-efficient effect, deprive their incentives to companies such as asset managers to improve performance. But it also brings some disadvantages to hinder the development of enterprises. The jingshan machine after MBO has been widely given attention, people are questioning the positive effects of MBO and asking that whether we should encourage support enterprises to carry out MBO or not.This paper, taking the jingshan machine as example of case analysis, to explore the cause of MBO performance decline, explore MBO in the reason of effect evaluation.Finally through the financial index method and annual report and CSMAR, refer to ten years' data of jingshan machine and the data of the same industry in several important points, based on the analysis of major operational matters in the company,we arrive at that it is because the change of management and operation capital operation of the corporate. So from this three Angle of the enterprise, it may bring the single-large shareholder, the risks of financing channels,the financial pressure of debt,the dictatorship of governance mechanism and maximize the interests of the individual, individualize the capital operation,take the risk of changing the investment direction.We Can conclude that MBO would bring some disadvantages to a certain extent affecting the development of enterprises.In the end, it is not to say that the incentives unfeasible or should not pursue, but for the incentives has its applicability enterprise type.Through contrasting with xin-lang's MBO based on the five aspects of applicability analysis.We can find that jingshan machine is not the target type of MBO,which led to the decline of the company's performance.Finally puts forward my own opinions and views towards the problems of equity transaction, supervision mechanism and applicability.