Study On Incentive And Control Mechanism Strategy For Professional Manager Of Defang Intelligence Company

The first generation private business owners are gradually reaching retirement age after experiencing almost 30 years of prosperity.Along with the growth of these companies and the changing macro environment,the market has shown tremendous demand for professional managers with qualified management skills.However,these private companies' corporate governance structure are not yet modernized.Many of these companies such as DeFang Intelligence Corporation,are eager to solve the following problems:separation between ownership and management,key issues about agency,effective incentive/authorization/control mechanism for professional managers,alignment on goals between owners and managers.This paper has come up with a new incentive and control mechanism strategy for today's professional managers through research on corporate governance,entrustment of agency,incentive system.Private companies are the most active entities in today's economy,and key factors for social development and continuing growth of the economy.This research will benefit the enrichment and completion of professional managers' incentive/control mechanism in private company sector,will benefit the modernization of private company's corporate governance structure.Professional manager's incentive/control mechanism has common characters across all organizations,it's also company specific.The author used DeFang Intelligence Corporation as case study,conducted document research,interviews,mechanism design,comparison and analysis,described the new strategy from 6 angels.Part 1 is foreword;Part 2 is overview of theory and practice;Part 3 is DeFang's current incentive/control system;Part 4 is the re-design of the system;Part 5 is comparison,and evaluation;Part 6 is conclusion and forward-looking.This paper discussed the importance of manager incentive/control mechanism for private companies,constructed new incentive mechanism from performance-based stock grant,EVA(Economic Valued Added)based KPI evaluation,power authorization.Constructed control mechanism from company institutionalization,contract,psychological agreement.The new strategy has been proved to be able to effectively to encourage and control manager's behavior,to accelerate company's growth,is meaningful and directive for today's practitioners.