Case Studies On Equity Incentive Compensation Of Hepalink Pharmacetical Co.,LTD

Since 1950s,equity incentive has gone through more than 60 years of continuous improvement and development,more and more companies will be equity incentive as a long-term remuneration incentive means. In 2005, China promulgated the relevant methods of equity incentive, which indicated that the implementation of equity incentive in China has the guarantee of laws and regulations. Equity incentive obtain the company stock by giving incentives on certain conditions , achieve a win-win situation between the interests of individuals in the company,retain management and technical personnel for the company at the same time. However, the proportion of accomplishing equity incentive is very small in China. But, there were problems on the equity incentive from planning to implement. Shenzhen Hepalink Pharmacetical Co.,LTD. ,as an important heparin producer in the domestic raw materials, listed in 2010.the starting price is 148 yuan / share, Listed less than one year,Hepalink stock plummeted and started equity incentive plan. After the first exercise period, Hepalink terminated the equity incentive plan.This paper studied the changes of financial performance of the company and the situation of heparin market in the same period before and after the implementation of equity incentive, and analyzed the reasons for the failure of Hepalink equity incentive and the effect of the implementation of equity incentive on Hepalink performance.This paper was divided into four parts.The first part is the introduction of the full paper,It describes the purpose and significance of the choice of equity incentive as the study briefly,and also introduces the background of equity incentive and explains the research ideas and methods used in this paper.The second part is case description.By introducing of Hepalinkon the development status, expound the reasons for the implementation of equity incentive, program arrangement, and then talk Hepalink's equity incentive all the process, and ask the questions.The third part is the case analysis, by introducing the concept of equity incentive,and explaining principal -agent theory, human capital theory and other related theory. It is used to announce the equity incentive plan and the annual data by the method of the case analysis. This paper analyzed the Hepalink equity incentive failure reasons in three aspects: the corporate performance the formulation of the authorization condition and the trend of the stock price. The fourth part is the research summary and suggestion.It summarized on the Hepalink equity incentive from the beginning to the failure and put forward the relevant recommendations in accordance with the failure cause.Through the analysis of this paper, it is found that Hepalink really has the problems, the failure of the incentive plan is not accidental, putting forward the specific suggestions,but because of Hepalink's own characteristics,the results of the study also has its limitations.