Evaluation And Optimization Of Equity Incentive Plan For Hengrui Medicine Company

Enterprise equity incentives are an enterprise incentive system that aims to motivate and retain core talents,and to give employees some shareholders' rights through additional conditions,to create a sense of ownership,and to form a community of interests with the enterprise,so as to achieve the long-term development goals of the enterprise.It has been widely implemented in the West since the 1980 s.With the continuous development of the economy,the reform of equity incentives has been continuously promoted,and related research is also increasing.Since equity incentives are implemented,they are not only factors that are internal to the enterprise,but also factors such as the social market.Therefore,in the actual working environment,the diversity of equity incentives and the particularity of different industries and different groups of people are increased.Based on this situation,this paper takes Hengrui Medicine as an example to study and expand its effect on equity incentives.The competition in China's pharmaceutical industry is fierce,forming a “diversified,small,and scattered” enterprise structure.After years of rapid development,the growth rate of China's pharmaceutical industry has begun to slow down,the market is becoming saturated,and the policy environment is becoming more stringent.This requires pharmaceutical companies to start from their own,enhance their core competitiveness,and attach importance to the cultivation of innovation capabilities.Faced with this situation,more and more enterprises in the pharmaceutical industry have implemented equity incentives to stimulate the vitality of enterprises and enhance their competitiveness.Therefore,this paper selects Hengrui Medicine,which is in an advantageous position in the pharmaceutical industry,and analyzes the effects of the two equity incentives implemented.Hengrui Pharmaceutical has implemented two equity incentive plans in 2014 and 2017 respectively.This paper will focus on its first equity incentive plan,based on the actual purpose of its equity incentive implementation,based on the theory of equity incentives,choose appropriate Financial data for longitudinal analysis.At the same time,in order to eliminate the influence of changes in the pharmaceutical industry policy and environment,this paper collects the relevant financial data of the A-share listed companies in the pharmaceutical industry or the relevant data of pharmaceutical companies with similar scale to Hengrui Medicine.In contrast,the evaluation of equity incentives for Hengrui Pharmaceutical is more objective and reasonable.At the time of analysis,this paper mainly analyzes the key time points of equity incentives,such as stock price changes at key nodes before and after the announcement.Through the analysis of various indicators,it is concluded that the equity incentive plan of Hengrui Medicine has problems such as excessive exercise price,single evaluation index and short exercise period.Based on this,hengrui medicine has not yet implemented part of the equity incentive to carry out specific improvements.