Research On The Effect Of Equity Incentive Of Hisense Electric

The separation of the right of management and ownership of the company produces the agency system,that is the owner of the company’s assets entrusts the assets to the manager management,and then the problem of principal-agent is created.Equity incentive is one of the important means of corporate governance.On the one hand,it can solve the conflict of interests between shareholders and managers,avoid the high agency cost caused by the difference between the two targets.On the other hand,the implementation of equity incentive can help enterprises to retain core talents and promote the growth of the company.In recent years,the equity incentive system has received considerable attention from the theoretical and practical circles.With the continuous development of China’s economy,the scale of enterprises is expanding,more and more companies have begun to adopt this system,and equity incentive has entered the "golden age".However,the development of equity incentive plan in our country is not rapid,and not all the enterprises that carry out equity incentive have been successful,and there are some problems in the process of implementation.There are some deep reasons which need further study.This paper first reviews the relevant literature on the motivation of equity incentive and the impact on the performance of the company,selects the Hisense as the research object,based on the four major theories,briefly introduces the background of the equity incentive system of the listed companies and the current situation of the implementation of the equity incentive in the household electrical appliance industry,and the main part of the three equity incentive plan of the Hisense electric appliance.The content is explained,the motivation and effect of equity incentive are analyzed.On the basis of comparison and analysis of the financial index and stock price of Hisense electric appliance before and after the implementation of equity incentive,the evaluation of the effect of the equity incentive of Hisense electric appliance is summarized,and the problems exposed in the equity incentive scheme are discussed.Finally,it puts forward the inspiration of this case analysis to equity incentive of other listed companies.The purpose of this paper is to provide a reference for the incentive effect of China’s household electrical appliance industry,especially the state-owned holding company,to promote the incentive of equity incentive,in order to promote the perfection of the equity incentive system and strengthen the internal governance of the company.