Research On The Opportunistic Behavior Of Qingdao Hisense Electric's Equity Incentive

As the most common long-term incentive form in global enterprises,the equity incentive links the incentive object and the company with equity,and established an incentive and restraint mechanism,between which forms the interest community: shares the company's operating results and undertakes the company's operating risk,it can solve the agency cost problem to a certain extent.A good equity incentive system is conducive to improving the microscopic basis of market operation and makes the value chain of the whole capital market stronger,and its successful implementation will certainly have a benign interaction with the capital market through the improvement of the company's performance.While the equity incentive has achieved remarkable results,its drawbacks have gradually become apparent.The correlation between share prices and operator compensation may inflate a person's profit-seeking mentality,leading to repeated situations in which management harms shareholders and other stakeholders when developing incentive plans.Some companies' stock option plans are clearly unreasonable,the proportion of the right to strike is alarmingly high,the price of the right is outrageously low,and the conditions of the right are within reach.What's more,operators use more aggressive measures for greater self-interest,such as improving the company's short-term performance through big mergers and acquisitions,or tampering with financial data by means of using earnings management and accounting fraud.Practice has proved that it is not effective to solve the differences of interests between shareholders and management by stimulating one's own power by equity.Because of the imperfection of corporate governance mechanism and the lack of effective supervision mechanism,managers have the ability to maximize personal benefits through opportunistic behavior in order to sacrifice the long-term interests of the company.Taking the equity incentive of Qingdao Hisense Electric as an example,this paper studies the opportunistic behavior that the management of Hisense Electric may adopt between the announcement date of the draft equity incentive and the exercise date,combing the relevant viewpoints of scholars at home and abroad,using the event study and so on to carry on the case analysis,analyzing the opportunistic behavior of Hisense Electric's management in equity incentive from two aspects of stock price and accounting performance,in the analysis process using SPSS software for verification,it is found that in the equity incentive of Hisense Electric,there is a tendency of choose draft announcement day and exercise day,opportunistic earnings management and selective information disclosure,performance appraisal fictitious threshold and other issues.An important reason for the opportunistic behavior of management is that the existing equity incentive mechanism tends to pay more attention to reward and incentive and neglects the punishment and restraint,which encourages the excessive risk-taking behavior and short-term behavior of company executives,and makes them deviate from the principle of prudence and the long-term development goal of the company,which brings great risk hidden danger.At the end of this paper,some suggestions are put forward at the level of equity incentive design and supervision,in order to make a more reasonable formulation of equity incentive plan and effectively regulate the opportunistic behavior in its execution,so that it can not only provide sufficient incentive for managers,but also guarantees the interests of investors and other stakeholders to be protected from infringement.