The Case Study Of Hisense Electric Equity Incentive

The separation of management rights and ownership is the important symbol of modern enterprise.Along with the separation of the two powers,the principal-agent contradiction is becoming more and more prominent.How to reconcile the contradiction becomes the difficult and hot point of the corporate governance.Because the shareholders and professional managers have different interests between the pursuit,and the general measures can not essentially eliminate the contradiction between management rights and ownership,so the equity incentive which can be tied between the interests of the two came into being.The emergence and application of equity incentive can effectively circumvent the short-sighted behavior of professional managers,and the interests of managers and shareholders tied together to promote the long-term stable development of enterprises.In the western developed countries,equity incentive has been applied and achieved good results.But until the early 1990 s,only a small number of enterprises began to exposure to equity incentives in our country.In 2006,the Measures for the Administration of Equity Incentives for Listed Companies(for Trial Implementation)promulgated by the CSRC stipulated that the equity incentive system in China began to enter the standardization process.A large number of listed companies began to publish the draft of equity incentive after 2009.At this point,the development of Chinese equity incentive enter the "fast lane." Hisense Electric acts as the leader in Chinese home appliance industry,and the research of its equity incentive can provide valuable experience for Chinese home appliance industry and listed companies.In this paper,it takes Hisense Electric equity incentive as an example to analyze.Firstly,it introduces the background of Hisense Electric and equity incentive program and implementation.Then,it draws a conclusion that the performance level,development ability,stock price and debt paying ability of the company are improved during the equity incentive period in the method of vertical comparison and horizontal comparison.On this basis,it analyzes the merits of Hisense Electric equity incentive.Next,we discuss the problems in the process of Hisense Electric equity incentive,such as the short period of validity of equity incentive and the imperfection of evaluation index system,and put forward the corresponding suggestions.Finally,it makes a summary of the full text.