Incentive Mechanism For Mutual Fund Managers In China

China's mutual fund industry has experienced 20 years' development since 1998 and has become an important source for asset management due to its investment professionalism and strong distribution ability to absorb residents' fund.In mutual fund's growth path,how to motivate fund manager effectively has been a critical corporate governance issue.The goal of fund manager incentive mechanism is to combine the interest of fund manager,fund owners and shareholder of the fund company together.The purpose of this research aims to discover the incentive mechanism to motivate fund managers effectively by using Z fund's case study.The theoretical basis for this research is agency theory which gives reasonable explanation for the theoretical reason and solution to this issue.The industry analysis part compares industry data in China and that in US to identify the issues and challenges face in China.The industry analysis also works as background information to understand Z fund's competitive position and strategy.Then the research focuses on Z Fund's innovative practices in motivating fund managers in terms of long-term evaluation mechanism,business division reform,fund manager ownership plan and equity incentive innovation.By analysing the rationale,the plan and the result evaluation of above innovations,the research result can be used to as a reference to other companies in the mutual fund sector.