Research On Optimization Of Hisense’ Equity Incentive Program Based On EVA

Equity incentive,this kind of governance model arises from the principal-agent problem brought by the modern enterprise’s response to the separation of control and management.Its idea is to let the manager play the shareholder’s identity to manage the company,so as to unify the manager and the owner’s goal.And ultimately lead the company’s performance and value of the upgrade.In China,as the home appliance industry’s market competition is the earliest to form,so the major home appliance industry listed companies is the first batch of equity incentive system to implement the industry.However,the theory of equity incentive from the west into China is still short,not yet mature theory cannot guide the practice,so the implementation of equity incentive in China’s listed companies tend to grow,but lead to vicious incentives.Equity incentive to encourage this situation is not groundless,such as China’s listed company Hisense Electric,the effectiveness of its equity incentive has been much questioned by the outside.Hisense original equity incentive program since the implementation has been criticized by outside media and scholars,and directed at the program is too simple to exercise conditions.In this paper,Hisense Electric,for example,the first comprehensive analysis of Hisense during the equity incentive performance changes and found Hisense’s performance in the implementation of equity incentive plan showed a substantial growth,not only completely out performed the incentive plan performance indicators,even more than the industry average several times,and before that,Hisense’s performance indicators only a small amount of the leading industry average only,not only that,immediately after the exercise of the year,Hisense performance indicators have fallen sharply,but super-normal growth After the inevitable trend.Based on the analysis of the financial data during the period of equity incentive of Hisense,this paper revises the EVA model according to the exercise conditions.In terms of grant ratio,taking EVA as the calculation condition,the ratio of the EVA value to the net profit value of the company is multiplied by a grant ratio,and the number of shares to be granted in the current year is obtained.This can be well with the equity during the incentive period to match the efforts,the higher the EVA value,will be awarded more shares,which in essence increase the effectiveness of equity incentives.In the terms of the exercise,EVA-based-indicators of adjustment is mainly in two aspects,one is the adjustment of net profit after tax.On the basis of this,EVA will adjust the accounting don’t meet the financial management concept of the profit and loss,the purpose is to offset the management of the use of accounting for earnings management behavior;the other is the adjustment of corporate investment capital,the investment capital is mainly debt capital and equity capital,in the debt capital to remove the nature of debt and some short-term financing,and on the basis of the assets,class subjects related regulation,for the accounting of some of the adjustment of assets to adjust the behavior of the red rectification.Accounting rigor and normative is its advantage,but it will be manipulated by the management of the deathful weakness,so the perspective of financial management from the financial statements of corporate accounting data to adjust the value of the enterprise to replace the net profit and other financial Indicators as the exercise conditions and the use of EVA on the amount of equity incentive to allow the amount of floating adjustment,will effectively limit the management of financial statements of the act of whitewashing,and finally use EVA as the right conditions to replace the original conditions,the observation of the original performance comparison of enterprises and the industry as a whole trend analysis of whether it can have Line conditions,to achieve performance targets.All in all,in the calculation of EVA,many of the data directly from the financial statements will be adjusted according to the actual situation of the enterprise;the purpose is to overcome the accounting statements of the restrictive,based on financial management point of view a true reflection of the enterprise year for operating conditions.This will reduce the management of the management of accounting profits to EVA as a condition of the exercise of equity options on the implementation of equity incentive plan for our company to provide reference and recommendations to scientifically and rationally regulate the implementation of equity incentive work,at the same time,popularizing and perfecting the design of the shareholding incentive system of the shareholding system in our country,so as to promote the further implementation of the equity incentive system in our country and have a positive urging effect for the governance of our modern enterprise.