Research On Equity Incentive Plan Evaluation Of Midea Group

In the modern enterprise management,business operators and the owner is separated,inconsistent between the two purposes,even sometimes form the opposite paradox,the implementation of equity incentive can effectively reduce the conflict between managers and owners,it effectively balance the interests between the consignor and agents,make more the interests of the operators and managers and organization bundled together,not only promote the staff's work enthusiasm,to strengthen the staff loyalty,also provides the guarantee to achieve sustainable and healthy development enterprise.Equity incentive mechanism has been very common in western countries.In recent years,listed companies in China began to pay more and more attention to the application effect of equity incentive,introduced it into their own management practices,and made corresponding plans.In 2005,the China Securities Regulatory Commission issued the measures for the administration of the listed company equity incentive and the company law,"securities law" and so on as the basis,in the case of Midea Group,using comparative analysis,case analysis of Midea Group,evaluation of the implementation of equity incentive of the use of the financial analysis method and B/S option pricing model,respectively,for the implementation of equity incentive effect and cost for quantitative analysis and qualitative analysis,through the three periods of Midea Group of equity incentive plan implementation effect analysis and evaluation,finally draw the conclusion: The equity incentive plan implemented by Midea Group conforms to relevant laws and regulations.The implementation of equity incentive can effectively improve the enthusiasm of employees and promote the company's performance.However,there are still some deficiencies in its equity incentive plan,which need to be improved.(2)the cost of equity incentive is too high.(3)the exercise price is susceptible to market factors.(4)exercise conditions ignore external environment factors.After analyzing the above deficiencies,the following improvement strategies are obtained :(1)optimizing performance assessment indicators,including the introduction of other relevant indicators,the combination of financial and non-financial indicators,the flexible setting of equity incentive types,and the reasonable setting of exercise price and exercise conditions.(2)effectively control the incentive cost and expenses.The incentive cost is too high in the original plan.In order to reduce the total incentive cost and personal cost,it is suggested to extend the validity period of equity incentive and increase the exercise period;Set a reasonable incentive period.(3)fully consider the exercise conditions.External factors are not taken into account in the exercise conditions.The exercise indexes set in the original scheme are designed on the basis of the internal environment changes of the enterprise,and the external macro environment changes are not taken into account.(4)paying attention to the external environment during the exercise period without considering the impact of the external market environment,the flexible exercise price is constructed to link the exercise price of the company with the industry index of the household appliance manufacturing industry;We will improve the environment for the securities market.