The Application Of EVA In The Compensation Incentive Of Enterprise Managers

China has witnessed rapid development of its market economy and many enterprises have introduced modern enterprise management system, that is authorizing professional managers to run the operation activities of the enterprise. Under the principal agent system, how to alleviate the problem of the first kind of agency problem, establish a reasonable incentive mechanism, promote the rapid development of the enterprise, are becoming an key problem that the enterprise owners concern.The owners of the enterprise tend to maximize shareholder value. And economic value (EVA) is an effective tool for the evaluation of managers' performance. On the basis of the existing motivation theories, this paper focuses on the compensation incentive system based on EVA, summarizing the calculation method of EVA, influencing factors and advantages. Combined with the case of GT company, this paper provides analysis of EVA in the enterprise's operation of compensation incentive systems. The financial data from 2011 to 2014 and operating conditions of GT company can be used to identify the effects of the current compensation incentive system and the defects are pointed out. Then are the measures for the improvement and a new design of EVA compensation incentive system. I compare the old incentive mode and the new one.The contributions of this paper lie in the fact that the compensation incentive theory and enterprise practical problems of GT company are combined and I analyze and put forward a series of feasible measures, introducing EVA in enterprise management. Not only does this paper promote the management level of GT company, but also may plays the role of guidance and reference for other domestic enterprises.