Study On The Equity Incentive Plan And Implementation Effect Of Midea Group

The equity incentive system has now become a common incentive for Chinese companies.However,in practice,many companies do not achieve the incentive effect of maximizing shareholder wealth,and there may be the phenomenon that executives use equity incentives to pursue their own welfare?Wu Yuhui,2010?^[1].Most of the academic circles explain the reasons for the lack of incentive effect from the formulation of equity incentive clauses.This article expla ins from the perspective of Manager power.Due to the imperfect governance structure of listed companies in China,in the formulation of equity incentive plans,and the managers can use their power to suppress the assessment Base-period performance.setting lower performance evaluation criteria and other methods?Xiao Shufang,2013?^[2]affect the equity incentive plan to achieve their own welfare?Wang Ye,2012?^[3].Therefore,it is necessary to study the influence of Manager power on the formulation of equity Incentive Scheme.This article conducts a case study on the two equity incentives of Midea Group.It is found that there is a serious part-time phenomenon in management of Midea Group Corporation.Lack of effective management power constraints,lack of transparency in the disclosure of shareholding plan information,lack of independence of the shareholding plan management committee,and lack of independence of the board of supervisors.These influencing factors have led to the opportunity for the senior executives of Midea Group to seek their own welfare through equity incentive programs;At the same time,the management of Midea Group through 2014 equity incentive to mobilize the enthusiasm of core technical personnel makes the corporate performance indicators rise.Through the 2015 equity incentive,the management team sets lower assessment indicators and shorter incentive validity period to seek benefits for management.The event research method,financial index analysis method and economic value added analysis method were used to comprehensively evaluate the short-term and long-term implementation effects of equity incentives.From the perspective of implementation effects,the 2014 equity incentive plan of Midea Group has significantly improved corporate performance.The 2015 equity incentive implementation did not significantly improve corporate performance,and even the operational capacity showed a downward trend.According to the above question,It is suggested that the supervisory department should further promote the separation of the two positions of the directors and the senior management and reasonably constrain the power of the management,strengthen the review and supervision of the disclosure contents of the equity incentive information of listed companies.And recommend that listed companies increase The independence of supervision and management of their equity incentive plans,and through the reasonable formulation of performance evaluation indicators to increase the incentive effect of equ ity incentive plans.