Case Study On Equity Incentive Of Midea Group Based On Strategy

Equity incentive is called option incentive--one of the most common methods to motivate employees currently,is a long-term incentive mechanism for enterprises motivate and retain core talents.Equity incentive is mainly through giving employees some shareholders rights and interests,forming interest communities with enterprises and promoting the growth together.Equity incentive system was introduced into China in 1990 s,but it is still in the exploratory stage.In 2005,the CSRC promulgated the administrative measures on equity incentive plans of listed companies(trial),which perfect the legal environment for the implementation of equity incentive,and more and more enterprises implemented equity incentive.With the growth economy,the government issued a series of policies such as "energy saving subsidy","old for new","home appliance to the countryside" to boost domestic demand,China’s home appliance manufacturing industry has achieved rapid and steady growth since 2009.But the depression of the real estate industry after 2015 has led to the depression of the home appliance industry.Based on this,this paper takes Midea group as the research object to discuss how to keep leading position in the household appliance industry and achieve long-term healthy development through equity incentive plan.From 2014 to 2017,Midea group has implemented four periods of stock option incentive plans,three periods of pepartner shareholding plans and one period of restricted stock incentive plan,with rich content and forms of equity incentive.Comparative analysis method and financial index method are used in this paper to compare the differences among the specific elements in diverse equity incentive schemes.Explore the motivation,then calculate financial indicators based on the data of the annual report from 2013 to 2017,analyze the impact of equity incentive on corporate financial performance.Finally,Observe the trend of stock prices changes to explore the impact of equity incentive on the market effect of Midea group.The equity incentive plans of Midea group are worth learning.It adopts diversified incentive modes,selects incentive objects reasonably,expands the incentive scope actively and guarantees the continuity of incentive.In addition,there are some problems such as lack of transparency in the disclosure of shareholding plan,the internal governance structure is incomplete,set unreasonable performance evaluation indicators and the period of validity.Finally,the full text is summarized.