TResearch On Implementation Effect Of Multi-level Equity Incentive In Midea Group

Our current economic development has changed from the high speed growth in quantity to the high quality development of the demand.High-quality development requires enterprises to shift their emphasis from scale growth to quality and efficiency,which requires enterprises to continuously carry out scientific and technological innovation and encourage innovation,so as to promote the industrial upgrading of manufacturing industry.Equity incentive is a kind of long-term incentive way,which can effectively reduce the agency cost of the company,improve the level of technological innovation of the company,but also can effectively mobilize the company’s human resources.Equity incentive is a kind of incentive method which is widely used in company.Since the official listing of Midea Group,the equity incentive plan of Midea Group has changed in the aspects of incentive object,incentive cycle and assessment method,and Midea Group’s management ability,industry status,innovation ability and profitability are constantly improving,and the company’s "principal-agent" problem is constantly being solved.This paper first describes the background and significance of the topic,and the relevant literature is combed and studied.The relevant theories and concepts of equity incentive are briefly introduced to pave the way for the following analysis.Then the general situation of Midea Group is introduced and the motivation of implementing equity incentive is analyzed.Then,the paper summarizes the specific plans of each level of Midea’s multi-level equity incentive plan and studies the implementation effect of each period of equity incentive plan.Among them,it analyzes the influence of different incentive modes on R&D expenditure,the influence of the setting of multi-level equity incentive exercise conditions on profitability and the assessment and attainment of the motivated objects,as well as the influence on personnel flow,etc.Finally,it is concluded that the equity incentive scheme of Midea Group should conform to the different development stages of the company in the choice of incentive mode,and should be consistent with the development strategy of the company when determining the incentive object.Multi-level equity incentive can improve the effectiveness of incentive.At the same time,this paper finds that Midea Group has some defects in the design of equity incentive scheme,such as too simple in the assessment index setting,lack of diversity,and puts forward the corresponding improvement measures.To sum up,the implementation of Midea Group’s equity incentive plan has played a positive role in improving the enterprise’s innovation ability,improving the human capital structure and equity structure,enhancing the enterprise’s profitability,and enhancing the enterprise’s market competitiveness.The successful experience of Midea’s equity incentive scheme is worthy of reference for other enterprises.Only by combining its own development situation and market environment,can it work out an equity incentive scheme in line with its own characteristics to play a better incentive role.