The Equity Incentive Of Erie:Executive Incentive Or Propping?

Equity incentive system generated in the United States in twentieth Century 50's.Before 2006,the listed company of our country had carried on many explorations to the practice of equity incentive,but its development was relatively slow.With the implementation of the "listed company equity incentive management approach" in January 2006 and the promulgation of the "state-owned holding market(domestic)implementation of the equity incentive pilot scheme",some of China's listed companies have started to implement equity incentive mechanism.However,according to the existing actual situation,the implementation of the equity incentive of some listing Corporation,also appeared the management in order to pursue the maximum of its own benefit and damage the interests of shareholders.This paper uses case analysis method to study the equity incentive of Erie group.Since the Erie shares is the first batch of the implementation of the equity incentive plan of the listing Corporation,its equity incentive plan and implementation have a strong typical role.Taking Erie Shares Incentive as a case study,it can provide suggestions for listing Corporation,especially the listing Corporation of dairy products industry and China's stock incentive system.To further improve the equity incentive system of listing Corporation,improve corporate governance structure and realize the maximization of corporate value is of great significance.In this paper,according to the research method of case analysis.Firstly,current situation and research background of the equity incentive is reviewed,describes research ideas and research content and research methods of related problems;Then from the theory of enterprise equity incentive are summarized in the paper;Based on Erie company's development and history,organization and the ownership structure,product management and market status,financial status and profit distribution,according to the Erie equity incentive plan,focusing on the analysis of Erie equity incentive plan implementation,after the implementation of the plan for the market reaction,financial performance and ownership structure changes,executives shareholding and dividends.In this paper,through the data analysis of the Erie shares of equity incentive plan of company executives,this plan is a kind of incentive or the interests of a propping;Finally up from the overall analysis of Erie equity incentive plan of the defects and the reasons,namely:Erie shares of equity incentive plan is not perfect and the executives deliberately set and modify the equity incentive draw up and lead to equity incentive become transfer of benefits,and puts forward how to avoid and reduce the executive profit-making behavior of enlightenment and thinking.