Midea Group’s Equity Incentive Plan And Effect Research

With the development of economy and society,the professional manager systems are accepted by the majority of companies,the issue of principal-agent and separation of the company’s ownership and management rights has received extensive attention.The emergence of equity incentives provides a good way to solve the problem of principal-agent.The social process of informationization is accelerating,and the demand and reliance on talents is more prominent.Equity incentives have room for the retention of talents for enterprises.Equity incentives were introduced into China’s capital market in the 1990 s,and development has been slow.In 2005,China implemented a share-trading reform,which provided a good opportunity for listed companies to implement equity incentives.Since January 1,2006,the implementation of the “Administrative Measures for Equity Incentives of Listed Companies(Trial)”,the “Administrative Measures for Equity Incentives of Listed Companies” was officially implemented on August 13,2016,and the number of equity incentives implemented in listed companies in China.Significantly increased,companies are constantly trying to use equity incentives to improve their own development and better retain talent.Among them,restricted stocks and stock options account for the vast majority,and the overall approach is relatively simple.This paper studies the case of Midea Group equity incentives to analyze its impact on company performance,and provides some reference for other companies in formulating equity incentives.This paper first expounds the relevant theories and concepts of equity incentives,lays the foundation of research through theoretical analysis,and sorts out the ways of equity incentives in China and the characteristics of various ways.Through the case of equity incentives implemented by Midea Group,the specific content of the entire incentive plan,the motivation of implementation,etc.,analyze the impact of this combination incentive program on company performance from multiple perspectives,and explore the reasons.Finally,conclusions and recommendations are made based on the case study.The main conclusions of this paper,first of all,enterprises should develop equity incentive cases suitable for their own development according to their own situation.For different levels of people,according to the characteristics of different incentives,develop targeted incentives,such as the combination of Midea Group stock options,restricted stocks and performance stocks,to take incentives.Secondly,it is necessary to improve the design of the entire incentive plan,from the aspects of exercise price,performance requirements,and exercise arrangements,to avoid the short-term welfare design of incentive programs,in order to better achieve the purpose of incentives and retention of talents.Finally,it is necessary to strengthen the construction of relevant laws and regulations,improve the information disclosure and supervision system,ensure the sound development of equity incentives from the system,and avoid becoming a tool for profit transfer and deepen the problem of agency.