Research On Equity Incentives And Corporate Performance Of Household Appliance Enterprises

Nowadays,more and more companies adopt equity incentive schemes,hoping to resolve the contradiction between principal and management and promote the sustainable development of enterprises.At present,there is no unified conclusion about the research on equity incentives and corporate performance.Some scholars at home and abroad believe that equity incentives positively relate to corporate performance,which is conducive to maximizing the common interests of shareholders and management.However,some scholars still believe that equity Incentives do not necessarily relate to company performance.Previous researches have focused on large-scale empirical studies of all listed companies that implement equity incentives,and few case studies on a specific industry.Household appliance industry is a representative of Chinese manufacturing industry.The research on equity incentives and corporate performance of household appliance enterprises will help promote the better development of the entire industry,which has practical significance.Therefore,in order to supplement this field,this paper selects the case study of the leader group of the household appliance industry,aiming to study whether the equity incentive of Midea Group relate to the corporate performance,and how the performance effect is,thus drawing corresponding enlightenment.Midea Group launched its equity incentive schemes for four consecutive years from 2014 to 2017,with the first three periods being stock options and the last period being stock options and restricted stock.In this paper,factor analysis and multiple linear regression analysis are used.The indicators of listed companies in the household appliance industry are selected,and the correlation between equity incentives and corporate performance is explored.By analyzing the four-phase equity incentive schemes of Midea Group,and comparing them with those of the other two representative enterprises in China’s home appliance industry,Qingdao Haier and Gree Electric Appliances,the similarities and differences,advantages and disadvantages of the three companies are summarized,and corresponding suggestions are provided.Based on the four-dimensional evaluation system of balanced scorecard,from the four dimensions of finance,customer,internal operation and learning and growth,the event research method is used to analyze short-term stock price fluctuations,and long-term financial indicators and economic value added are selected.In addition,the paper adopts some non-financial indicators,such as market share,percentage of R&D personnel,R&D expenditure,patent application volume,incentive staff participation and turnover rate,to analyze the short-term and long-term performance effects of Midea Group’s equity incentives,taking into account the actual situation of Midea Group and Chinese home appliance industry.The research result shows that for the listed companies in Chinese household appliance industry,the equity incentives and the corporate performance show a significant positive correlation.Midea Group’s equity incentive schemes are generally reasonable in design,have a significant effect on performance improvement,mainta:in the common interests of shareholders,company and employees,bring more returns to shareholders,have achieved the expected implementation effect.At the same time,there are still some insufficiency in incentive modes,exercise conditions and incentive scales.Based on this,the relevant proposals for the design and implementation of equity incentives are given,which can provide reference for Midea Group and other companies in the same industry.