Analysis On The Motivation And Implementation Effect Of Secondary Equity Incentive In Huahai Pharmaceutical

Equity incentive was born to alleviate the principal-agent problem in modern corporate governance.This mechanism has been widely used in the world.After the implementation of the new regulations on equity incentive in August 2016,the number of listed companies implementing equity incentive in China showed an explosive growth,but the specific implementation effect was not satisfactory.For most domestic companies,a scientific and reasonable equity incentive plan is the first step to achieve good incentive effect.According to the existing research results,equity incentive can be divided into incentive type and welfare type according to motivation,and incentive motivation determines the design of various elements of equity incentive plan,further determines the rationality of incentive plan,and thus affects the final implementation effect of equity incentive.Huahai pharmaceutical launched the second phase of equity incentive plan two years after the first equity incentive,and the two phases of incentive plan have obvious differences in the scheme design and implementation effect,which is of rich research value.Therefore,this paper attempts to explore the rationality of the equity incentive scheme design and its impact on the company's comprehensive performance from the perspective of the real motivation of Huahai pharmaceutical's secondary equity incentive.Based on the above background,this paper makes a detailed analysis oftwo equity incentives of Huhai pharmaceutical company through case analysis.First of all,this paper compares the design of the elements of the two-phase incentive plan to determine the problems existing in the company's first incentive and the real motivation of the second incentive.Then,this paper investigates the implementation effect of secondary equity incentive from four aspects,including the short-term market effect of the incentive plan announcement,the change of the company's financial performance before and after the implementation of equity incentive,staff structure and stability,and innovation ability,in order to verify the rationality of the above analysis.The main contents of the case analysis are as follows :(1)This paper analyzes the element design of the two-period equity incentive plan of Huahai pharmaceutical,and finds that the common problems existing in two incentive plans are that the incentive period is short and the performance evaluation index is single;At the same time,compared with the first plan,the second plan of incentive plan has a more reasonable unlocking ratio and focuses on the incentives for grassroots employees.The unlocking conditions are set strictly and the incentives are stronger.(2)this paper analyzes the motivation of Huahai pharmaceutical to implement secondary equity incentive,and finds that the motivation is to improve the long-term incentive mechanism and accelerate the realization of secondary industrial transformation and upgrading;to attract and retain outstanding talents to jointly promote the sustainable development of the company;to increase research and development investment,promote thecontinuous improvement of enterprise innovation ability.(3)This paper analyzes the effect of Huahai pharmaceutical's second equity incentive and finds that the short-term market response of the second incentive is relatively positive.The financial performance of the company has been improved in the short term;The dismission rate of employees decreased,and the proportion of highly educated talents increased.Research and development input and output have a relatively large increase,which means the company's innovation ability improve.Based on the case analysis of Huahai pharmaceutical's equity incentive,this paper puts forward the following suggestions: Appropriately extend the validity of equity incentive;Establish diversified assessment indicators;Choose the incentive mode flexibly by period and object.