A Study On The Long - Term Incentive Mechanism Of Central Enterprises

The purpose of this article is to provide relevant recommendations on the necessity, feasibility and methodology to establish a principal Long-Term incentive mechanism of principal’s salaries in central enterprises.The necessity for establishing a principal Long-Term incentive mechanism of principal’s salaries were introduced based on the analysis of the institution of modern enterprise, the avoidance of the short-sighted decisions and the policy for attracting people with ability. Furthermore, the feasibility was also studied in aspects of the supervisors, polices and laws. Some examples about the exploring the mechanism on this issue were also provided here.In this article, theories for Long-Term incentive mechanism were reviewed, which supported this mechanism theoretically and provided clues for further studies. Some popular practices for domestic and international enterprises in this issue were also introduced, including stocks and share-option, the Golden Parachute, pension and annuities.Here, in this article, the top-level design of the Long-Term incentive mechanism of principal’s salaries were proposed in aspects of the prerequisites, organizational management and supervision and assessment. Based on our design, some policies were tabled for the government.Finally, the principle and workflow of the Long-Term incentive mechanism were introduced. The measures taken by the subsidiary corporations of the HengTian Corporation were introduced to explain that this incentive mechanism could increase the production value of the enterprise as well as increase the state-owned property.