Discussion On The Equity Incentive Of Qingdao Hisense Electric Appliance

In modern enterprise management,equity incentive is considered as a good prescription to solve the principal-agent problem.By binding the interests of shareholders and managers together to reduce the self-interest of the managers and reduce the managers' damage to the interests of shareholders,the managers spontaneously consider the long-term development of the enterprise.After years of practice abroad,it has proved its feasibility and has been widely promoted and used.After the introduction of the stock incentive management method of Listed Companies in January 1,2006(Trial),Chinese enterprises began to pay attention to and have a lot of enterprises to carry out equity incentive.Qingdao Hisense electric appliance is one of them.This article hopes to bring a new thought to the content of Hisense electric equity incentive through the discussion of the case of equity incentive.Besides,it can also provide reference and reference for the listed companies in the future when they implement the equity incentive plan.Equity incentive is a way for enterprises to take part of their equity to motivate senior management or excellent employees.It gives the business operators certain economic rights through the ownership of the company,so that they can participate in the decision-making,share the profits and take the risks in the identity of the shareholders,so as to serve the long-term development of the company diligently.Its models include stock options,virtual stock options,stock options and stock appreciation rights.In order to design an equity incentive scheme,it is necessary to determine the incentive target,and then determine the incentive scheme and the conditions for the implementation of the equity incentive.Finally,we need to design the assessment conditions and the way of exercising power.The development of equity incentive relies on contract theory,human capital theory and principal-agent theory.This paper,taking the case of Qingdao Hisense electrical appliance incentive,first introduces the general situation and the ownership structure of Qingdao Hisense electric appliance,and describes the process of the equity incentive of Hisense electrical appliance at that time,including the scheme of the equity incentive of the Hisense electric and the implementation of the three execution of the Hisense electrics.In the analysis of the case of Hisense electric appliance in Qingdao,we find that the incentive of the Hisense electric appliance is mainly to stabilize the talent team to reduce the loss of talent and relieve the pressure of the enterprise's performance.At the same time,it also hopes to solve the unreasonable salary structure.But from the examination period,it is obvious that the equity incentive is not very successful.After the assessment period,the growth rate is positively negative,the gross interest rate and cash flow decline rapidly,and the stock backlog is also prominent.It can be seen that the prosperity of the performance during the assessment is caused by management earnings management.There are obviously some problems in the design of incentive,such as too loose right conditions,excess returns and imperfect performance appraisal system after the executive's unequal advantage.There is a lot of energy on how to gain greater benefits rather than how to develop the enterprise,the interests of the executives and the convergence of the long-term interests of the shareholders.It's not good enough.Through the study of this case,the following conclusions are drawn: the right conditions are too loose,and the management layer can easily reach the right conditions,and the information is wrong,and the management layer is overpaid and the performance appraisal system is not perfect,which leads to the poor incentive effect of the equity incentive.In view of the above phenomena,I think that adopting the progressive mode of equity incentive can effectively avoid the loose right conditions,and the management layer can easily reach the conditions of the right to travel.In view of the problem of information wrong,we can reduce its influence by strengthening the external environment construction of equity incentive。And improve the performance evaluation system to strengthen the incentive effect of equity incentive.