Influence Of Equity Incentive On Market Value Management

Equity incentive mainly solves the problem that the interests of managers and shareholders are inconsistent.Through equity or options,managers’ identities become the dual identities of workers and owners,and shareholders and managers become a community of interests.Equity incentive as a core stability and incentive executives and staff of long-term incentive mechanism,has gradually become the important means of listed companies to market management,its role in the logic of value management is:the company equity incentive plan for managers,managers to work hard,the company’s performance continue to rise,the value of the company continue to grow,the company stock price continues to rise-gain share dividends and capital gains from managers.Based on the need of market value management,the implementation of equity incentive is to show external investors that the management is very optimistic about the future of the company.Equity incentive in the market value of management,both belong to the content of value creation,motivate managers to create value,and belongs to the content of the value realization,because management and core backbone with the company’s interests and the interests of the shareholders bundled together for a long time,to the outside investors in the capital markets send a very clear signal,namely the core staff management and bullish on the company’s future development.Compared with external investors,the company’s management and its employees know more about the company.If they are optimistic about the company and are willing to bind their future interests with the interests of the company,external investors will prefer the company and are willing to pay more premium.Taking the equity incentive implemented by Midea group from 2014 to 2018 as an example,this paper constructs an analytical framework of "equity incentive--manager behavior--value creation activity and value realization activity--market value management" to analyze the influence and role of equity incentive on market value management.Firstly,it analyzes the implementation of Midea’s equity incentive plan from various incentive factors and internal characteristics,analyzes the market reaction of Midea’s implementation of equity incentive,and finally analyzes the influence and role of Midea’s implementation of equity incentive on market value management from two aspects of product end and capital end.The main conclusion of this paper is that the implementation of equity incentive by Midea group can not only help enterprises improve performance and create intrinsic value of enterprises from the industrial end,but also transfer enterprise value from the capital end,so as to promote the market value management of enterprises.Value management is an important indicator in performance management,to our country listed company equity incentive,suggest combine accounting index and market index both at the same time for performance appraisal,and according to the goals of the company to adjust the weight of the two,both external and internal value creation of enterprise value realization of the capital market.