Study On Effect Of Equity Incentive Of Midea Group

Equity incentive is a long-term incentive method for incentive companies to give company stocks under certain conditions.Because of the appreciation of stocks in the future,employees of the company will meet with the company's owners(shareholders)in order to obtain company stocks and expected stock returns.From the same perspective,they share the risks of the company and work hard to increase the profits of the company and the value of the stock.The incentive model of equity incentives was first implemented in companies in the United States,the United Kingdom,and other countries.Researchers found that equity incentives played a crucial role in reducing agency costs,mobilizing employees' long-term work enthusiasm,and improving company performance.The introduction of the equity incentive model in China was around the1990 s.Due to the imperfection of the capital market and many reasons,equity incentives have only been widely used in enterprises in recent years.The Measures for the Management of Stock Incentives for Listed Companies(Trial),promulgated and formally implemented by the China Securities Regulatory Commission on January 4,2006,indicates that there are clear policy guidelines for the construction of the equity incentive system for listed companies in China,and the introduction of stock incentives into practical and standardized operations.stage.Whether the equity incentive plan can actually achieve the expected incentive effect after the implementation of the enterprise depends on the rationality of the design elements of the equity incentive plan.After combing the domestic and foreign research on equity incentive and the theoretical basis of equity incentive,this paper analyzes the aspects of incentive and restraint,management performance,human capital management and market competitiveness.Using the combination of financial data and non-financial data,the stock option incentive scheme implemented by Midea is studied.Finally,some suggestions are put forward: to improve and enrich the performance evaluation standard,to establish a perfect equity launch mechanism,and to establish a special institutional and legal mechanism for the implementation of equity incentive.Through the study of the US group equity incentive plan,it was found that the implementation of the US group equity incentive has the effect of encouraging and restraining the incentive target of the enterprise,retaining the senior management and core talents for the enterprise,and stabilizing the main business in the depressed industry background.Revenue from business operations,control of operating profits fluctuate within a small range,and ensure that companies are in a leading position in the industry.In addition,the general problems existing in the design of basic elements in the equity incentive plan of listed companies in China are analyzed.The main problems are: the exercise conditions set in the equity incentive plan are not reasonable,and they attach importance to the assessment of theindicators of the response to business performance,and ignore the long-term reflection of the enterprise.The assessment of development capability indicators and non-financial indicators also cannot reflect the efforts of the incentive targets;the implementation targets of equity incentives are not clear enough,which affects the incentive effect;and the publicity of equity incentive evaluation criteria is insufficient,and the enthusiasm of incentive targets is not mobilized;The phenomenon of insider control is obvious,causing his own people to inspire himself and fail to achieve the desired incentive goals.At the same time,this article makes a concrete analysis of the design elements in the equity incentive plan of Midea Group and finds that the rationality of the design factors influences the implementation effect of equity incentives.In addition,optimization suggestions have been put forward for the irrationalities in the design of the basic elements of the equity incentive plan for listed companies in China.