Research On The Influence Of Continuous Equity Incentive On Enterprise Performance Of Hengrui Pharmaceutical

The development of the pharmaceutical industry is closely related to national security and national health.With the rapid development of the national economy and the increasing improvement of people’s living standards,people’s attention to the pharmaceutical industry continues to increase.The pharmaceutical industry is characterized by large R&D investment,high R&D risk,strong profitability and long R&D cycle.Its high profitability is based on its ability to provide better care to patients,and only by developing the best products at the lowest cost can it compete in the market.Equity incentive plays a key role in stimulating talent potential,improving enterprise performance and enhancing enterprise market value.The existing literature at home and abroad has a relatively complete research on the relationship between equity incentive and enterprise performance,but there are few studies on the relationship between continuous equity incentive and enterprise performance.Therefore,this paper selects Hengrui Pharmaceutical,an enterprise with strong growth and high demand for R&D and innovation in Chinese pharmaceutical industry in recent years,as the research object to study whether the implementation of continuous equity incentive can effectively improve enterprise performance.Alleviate the conflict between the principal and agent of enterprises,attract and stabilize excellent technical talents,and enhance the core competitiveness of enterprises.In this paper,Hengrui Pharmaceutical is selected as the research object,literature research method,case analysis method,event research method,financial index method and other research methods are used to analyze and evaluate the market performance,financial performance and non-financial performance of Hengrui Pharmaceutical based on the financial data from 2010 to 2020.In addition,Fosun Pharmaceutical and Changchun Pharmaceutical that have implemented equity incentive are introduced to make horizontal comparison with enterprises that have not implemented equity incentive and meet the conditions in A-share market.First of all,in terms of market performance,this paper selects the first announcement date of Hengrui Pharmaceutical’s three consecutive equity incentives as the event day,and analyzes that the equity incentive behavior of Hengrui Pharmaceutical has been recognized by the market during the window period,and the stock price has been increasing.Secondly,in terms of financial performance,this paper uses the financial index method from vertical and horizontal dimensions to analyze the solvency,operation,profitability and development ability of Hengrui Pharmaceutical,and concludes that the relevant financial indicators of Hengrui Pharmaceutical have been effectively improved after three consecutive equity incentives.Finally,in terms of non-financial performance,this paper starts from three perspectives: employee structure,executive resignation and R&D ability,and analyzes that after three consecutive equity incentives,the proportion of highly educated talents in Hengrui Pharmaceutical increases,the turnover rate of senior executives decreases,and the R&D results grow rapidly.Through the above research,this paper draws the following conclusions:(1)the implementation of equity incentive plan can effectively improve the comprehensive performance of Hengrui Pharmaceutical;(2)The implementation of continuous equity incentive of Hengrui Pharmaceutical has effectively improved the incentive intensity;(3)The timing of the equity incentive plan of Hengrui Pharmaceutical is appropriate,which greatly improves the incentive effect.At the same time,it is found that the equity incentive scheme of Hengrui Pharmaceutical can be improved,and then combined with the industry background,industrial policy and economic development trend,the following four suggestions are put forward:(1)Adopt diversified equity incentive;(2)Establish reasonable criteria for selecting incentive objects;(3)Develop diversified performance evaluation indicators;(4)Appropriately raise the grant price.It provides reference for Hengrui Pharmaceutical and other enterprises in the same industry to formulate equity incentive schemes.