Research On The Motivation And Consequence Of The Termination Of Equity Incentive In Hengrui Pharmaceutical

Since 2006,domestic listed companies have introduced equity incentive plans one after another,and the equity incentive mechanism has become a "powerful tool" to enhance the management level of enterprises and improve the motivation of employees.However,with the introduction of a large number of equity incentive plans,many companies have also terminated their equity incentives.However,the research on equity incentive at home and abroad mainly focuses on the design of the scheme and the impact on the performance of the enterprise,but there is less research on the termination of equity incentive.This thesis analyses the motives and consequences of the termination of equity incentives in the case companies,which is of some significance to supplement the research related to equity incentives in China and improve the success rate of the implementation of equity incentives in enterprises.Based on domestic and international research and relevant theories,this thesis takes Hengrui Pharmaceutical as an example to explore the motives and consequences of its termination of the implementation of equity incentives.In terms of motivation analysis,firstly,it introduces the content,necessity and characteristics of the implementation of the equity incentive plan of Hengrui Pharmaceutical,and at the same time combines the motivation of the termination of the equity incentive of listed companies with the new employee share ownership plan of Hengrui Pharmaceutical in 2022,so as to explore the motivation of the termination of its equity incentive.In terms of consequences,four main aspects were analysed: market reaction,financial performance,executive stability and corporate R&D capability.The following conclusions were reached: in this case,the motivation for the termination of the share incentive scheme was the fall in share price,the impact of the industry policy,the improvement of the performance assessment index to meet the transformation needs,the change of incentive targets and the reduction of the time cost of re-incentives.With regard to the consequences of the termination of the equity incentive plan,in terms of market reaction,the termination of the equity incentive plan did not show negative market reaction in the short term due to the continuity of the equity incentive plan of Hengrui Pharma.In terms of financial performance,the termination of the equity incentive scheme had a negative impact on the financial performance of Hengrui Pharma.In terms of executive stability,the resignation of executives has not been alleviated.In terms of R&D capability,in the context of drug collection and the transformation of pharmaceutical manufacturing enterprises,corporate R&D investment still increased after the termination of the implementation of equity incentives,and the termination of equity incentives did not reduce the R&D capability of the enterprise.Finally,this thesis puts forward relevant insights and suggestions based on the research results,hoping that the analysis of the case of Hengrui Pharmaceutical can expand the scope of research on equity incentives,help enterprises improve the design and implementation of equity incentive programs,and help investors make rational decisions.