Research On The Equity Incentive Of Hisense Electric Appliances

Long-term incentive Mechanism-equity incentive can effectively motivate employees to work hard,aviod employees’ short-sighted behavior,make the enterprise executives pay attention to the long-term interests of the enterprise,and then optimize the corporate governance structure,improve corporate performance.At the end of the 19 th century,enterprises in western developed countries were able to apply equity incentive maturely and were widely used by listed companies.In contrast,Equity incentive has sprouted late in China,and has not been fully developed.Until the beginning of the 20 th century,China promulgated the "listed equity incentive method",it marks the official opening of equity incentives in China.Then equity incentive has been widely used in listed enterprises in China.By the end of 2015,more than 800 listed companies had introduced equity incentives.However,different incentive schemes have different incentive effects.The effect of equity incentives introduced by many companies is inconsistent with the original intention.Therefore,it is worth discussing whether a company can promote its own performance by introducing equity incentive.This paper takes Hisense as an example,Firstly,the background and significance of this paper are expounded,and then the related concepts and basic theories of equity incentive are expounded.According to principal-agent theory,human capital theory and information asymmetry theory,from the implementation of Hisense Electric shares in the background,specific programs,implementation of the results of the analysis of the program.Then according to Hisense’s 2008-2016 data,The effect of equity implementation is analyzed from profitability,operational capacity,growth capacity and stock market performance.The program is evaluated from indicators,personnel and internal controls.Finally,the conclusion are: 1.Hisense’s profitability in 2008-2011 has improved.2.Operation ability,stock market,growth ability did not get substantial development.In terms of employee turnover,some executives have chosen to step down over the duration of the equity incentive plan to give up their rights and interests,while middle managers have also left in large numbers.So,Hisense Electric shares incentive results and the original intention of the opposite.It shown some drawbacks:For example,simple performance indicators,short waiting period,grant object set,ignore the importance of technicians and salespeople.For some problems existing in equity incentive,this paper gives some advice for improvement.As setting reasonable assessment indicators,combination of long and short term equity incentive schemes,perfect the internal governance structure of the company.Equity incentive is becoming more and more mature in China’s listed enterprises,so the conclusion of this paper can make some contributions to the future of other listed companies after the introduction of equity incentive plan.