The Influence Of Equity Incentive On Innovation Performance Of Pharmaceutical Enterprises

During the Tenth Five-Year Plan period,in order to promote the transformation of pharmaceutical enterprises to innovation-driven,China has successively promulgated many policies.For example,the "Tenth Five-Year Plan for the Development of Pharmaceutical Industry" promulgated in 2022 proposed that pharmaceutical enterprises should speed up technological change and industrial integration,improve the quality and efficiency of R&D,and achieve high-quality development of enterprises.As a technology-intensive enterprise,pharmaceutical enterprises must rely on innovation if they want to win advantages in the fierce market competition.Under the background that the country encourages innovation and the industry needs innovation,how to improve the innovation strength of enterprises has gradually become the core issue that pharmaceutical enterprises need to pay attention to.The R&D innovation of pharmaceutical enterprises depends on the initiative of innovative subjects.Therefore,it is particularly important to implement a reasonable and effective incentive system to improve the initiative of innovative subjects.In recent years,with the continuous improvement of relevant systems,equity incentive system has been more and more applied to corporate governance,which is considered as one of the important means to improve the enthusiasm of employees.Based on this,it is of great significance to study the influence of equity incentive on the innovation performance of pharmaceutical enterprises.This paper selects Huahai Pharmaceutical as a case study object,uses literature research,case analysis and comparative analysis to deeply study the impact of equity incentives on innovation performance,in order to put forward relevant suggestions for other pharmaceutical companies.Firstly,this paper reviews and sorts out the domestic and foreign literature related to equity incentive and innovation performance,and understands the research level of these two at home and abroad.Secondly,the key concepts are defined,and the relevant theories involved in the research questions are expounded,which provides theoretical guidance for the following analysis.Thirdly,the two-phase equity incentive plan of Huahai Pharmaceutical is introduced in detail,the similarities and differences of the two phases are compared and analyzed,and the implementation motivation is analyzed.Finally,after clarifying the path of equity incentive affecting innovation performance,the innovation activities are divided into three stages: innovation input,output and income generation,and the impact of Huahai Pharmaceutical’s equity incentive on innovation performance is reflected through the changes of innovation indicators before and after the implementation of equity incentive in each stage,as well as the comparison with companies that have not implemented equity incentive in the same industry.The conclusions are as follows:(1)equity incentives have an impact on innovation performance through corporate governance and employee behavior,including reducing agency costs,improving risk-taking willingness,increasing innovation investment by executives,improving innovation efficiency by core technical employees,and ensuring innovation revenue generation by core business personnel.(2)Huahai Pharmaceutical’s equity incentive improved its innovation performance.Based on the longitudinal comparison perspective,in the stage of innovation investment,R&D expenditure and R&D intensity have been significantly increased after the implementation of equity incentives,and the professional quality of R&D personnel has also been greatly improved.In the stage of innovation output,the number of patent applications of Huahai Pharmaceutical has been continuously improved,and the R&D efficiency has been improved in a short period of time.In the stage of innovation and income generation,the company’s profitability has increased while gaining a good reputation.Based on the perspective of horizontal comparison,the indicators of Huahai Pharmaceutical at all stages are significantly higher than the industry level.(3)Stock options help to promote management to make innovative decisions and increase innovation investment,and for core technical employees,restricted stock is more attractive to them,and is more conducive to promoting their innovation,increasing innovation output,and realizing innovation benefits.In summary,relevant suggestions are put forward: improve the company’s internal governance structure,flexibly choose the equity incentive model,appropriately expand the scope of incentive targets,appropriately extend the term of equity incentives,and improve the comprehensive performance assessment conditions.