Analysis Of The Defamily Equity Incentive Plan And Implementation Effect Of Midea Group

In a market economy,the organizational form of family businesses is constantly facing new opportunities and challenges.In order to maintain a competitive advantage in a fiercely competitive market environment,family businesses need to find the most suitable development path.Adjusting the equity structure to achieve de-familialization and introducing professional management talents such as professional managers are ways that many family businesses adopt to improve their professional management capabilities and technological innovation capabilities,thereby further promoting their development.However,the introduction of professional management talents such as professional managers can also bring new principal-agent conflicts.To solve these principal-agent conflicts,some enterprises have adopted equity incentive plans.By linking the interests of the company’s core technology management talents with the company’s economic performance,talents can share in the company’s profits while bearing some of the operational risks,forming a community of shared interests and achieving shared company results.This approach can not only improve talent retention but also effectively resolve principal-agent conflicts,reduce business operating costs,and mitigate the risks of talent loss and potential agency costs.Equity incentive plans can not only provide new development paths for the improvement of a company’s own equity structure but also help companies achieve strategic goals and promote financial performance growth.Therefore,in a market economy,family businesses can solve principal-agent conflicts,improve their professional management capabilities and technological innovation capabilities,and maintain their competitive advantage and achieve sustainable development by adopting equity incentive plans and other similar methods.The main focus of this article is on the non-familial equity incentive plan and its implementation effects in Midea Group.Firstly,by reviewing domestic and foreign literature materials,this article analyzes the basic elements,theoretical overview,correlation,and influence path of the non-familial equity incentive plan,as well as its economic and non-economic effects to construct a logical framework for the implementation effects of the non-familial equity incentive plan.Secondly,this article conducts an in-depth analysis of the impact mechanism of Midea Group’s non-familial equity incentive plan and clarifies the impact effects.Finally,this article conducts a detailed analysis of Midea Group’s non-familial equity incentive plan implementation effects.The study explores the effects of Midea Group’s equity incentive plan implemented after removing familial equity.The authors will conduct a detailed analysis of Midea Group’s de-familialization process and the 28 equity incentive plans implemented since 2014,especially in-depth research on the design of equity incentive plans.The implementation effects of equity incentive plans will be analyzed through three parts: traditional financial capacity indicators analysis,EVA economic value-added analysis,and non-financial indicator analysis.The changes in Midea Group’s equity incentive system before and after de-familialization will be compared.Based on empirical research results,the advantages and disadvantages of the non-familial equity incentive plan will be summarized.Through the combination of research and case practice,this article concludes that implementing equity incentives in traditional family-owned enterprises can have a positive impact on their business capabilities,company performance,human capital needs,and achieving "de-familialization." This article also provides insights and practical experience for future equity structure adjustments and equity incentive plan designs in traditional family-owned and home appliance enterprises based on the analysis of Midea Group’s non-familial equity incentive plan and its implementation effects.