Research On The Effect Of Equity Incentive Of Yong’an Pharmaceutical

As an important benefit sharing mechanism for enterprises,equity incentive has important significance for corporate strategy and long-term sustainable development.The key to enhancing the competitiveness of the pharmaceutical manufacturing industry lies in R&D innovation.In response to the medical reform policies and market changes in the pharmaceutical industry,Chinese pharmaceutical manufacturing enterprises have increased their R&D innovation efforts to attract core technical talents,accelerate the process of enterprise transformation strategy,and achieve enterprise value growth.The R&D and innovation of enterprises are characterized by long R&D cycles and high risks.During the R&D process,problems such as low returns and waste of funds may arise due to principal-agent conflicts.In the context of supply side reform,mergers and acquisitions,refinancing,and equity incentives have become important ways to stimulate the vitality of the securities market.Among them,equity incentive is an important means to alleviate principal-agent conflicts and constrain executive behavior,which can achieve deep binding of shareholder interests and management interests,and urge management to make prudent business decisions.Subsequently,the Chinese government issued a series of equity incentive related policies,established and improved the equity incentive system,and refined the implementation criteria for equity incentive.In September 2016,China adjusted its equity incentive tax policy,especially for innovative enterprises,including the method of restricted stock in the scope of tax incentives to reduce the tax costs of enterprises and incentive targets.It is against this background that Yong’an Pharmaceutical has implemented equity incentives and achieved significant results.This article first introduces the research background and significance of the article,reviews the literature on the motivations,models,and implementation effects of equity incentives,and defines the concepts of equity incentives and corporate performance.Based on the principal-agent theory,stakeholder theory,and two-factor incentive theory,this paper analyzes the motivation of equity incentive in Yong’an Pharmaceutical,sorts out the process of implementing equity incentive in Yong’an Pharmaceutical,analyzes the market reaction after implementing equity incentive in Yong’an Pharmaceutical using event study method,and discusses the impact of equity incentive on the development strategy,research and innovation of Yong’an Pharmaceutical,Further explore the impact of equity incentives on the operational performance of Yong’an Pharmaceutical.Research shows that:(1)Equity incentives have brought good stock market reactions to Yong’an Pharmaceutical,attracting investors’ attention.(2)Equity incentive has promoted the process of Yong’an Pharmaceutical’s development strategy,which is conducive to achieving business transformation and extending the enterprise’s industrial chain.(3)Equity incentives have promoted the R&D and innovation of Yong’an Pharmaceutical,accelerated the transformation of innovative achievements,and contributed to enhancing the core competitiveness of the enterprise.(4)Equity incentives have improved the financial performance of Yong’an Pharmaceutical,which is conducive to the sustainable development of the company.