Research On Equity Incentive Program And Implementation Effect Of Company B

With the rapid development of China’s economy,health care has become an important topic in the field of people’s livelihood.People’s desire for a healthy life and the reality of the accelerated aging process have prompted the pharmaceutical industry to deepen reform and optimize management.The country continues to introduce relevant policies to help upgrade the pharmaceutical industry,while also promoting the rapid development of pharmaceutical enterprises.Although the pharmaceutical industry is in a strategic opportunity period,pharmaceutical companies are still facing fierce competition,how to retain and motivate talents,so that the company continues to develop with high quality is a problem that all companies must solve.Many listed companies choose equity incentive as one of the solutions in this stage.Since the equity incentive was first introduced by Fizer in 1952,more and more companies have applied this system to corporate governance.Since the beginning of this century,China has carried out the equity share reform and gradually improved the equity incentive management methods,and the number of pharmaceutical companies implementing equity incentive plans has been increasing.Companies hope to use this system to motivate and discipline core managers and technical backbones,so as to improve the company’s business performance and governance effectiveness.Therefore,based on the principal-agent theory,human capital theory and incentive theory,this paper selects company B of pharmaceutical manufacturing industry as a case study.Therefore,based on the principal-agent theory,human capital theory and incentive theory,this paper selects company B in pharmaceutical manufacturing industry as a case study and studies its equity incentive program and its implementation effect.The paper firstly compares the relevant literature from three aspects: the motivation of equity incentive implementation,implementation effect and evaluation method,introduces the overall overview of the case company,the motivation of implementation,and analyzes its five equity incentive plans to summarize the characteristics of the plan.Secondly,using case study method,event study method,and financial analysis method,we explore the implementation effect of equity incentive by analyzing the market reaction,financial performance,and non-financial performance impact before and after the announcement of the company.This research paper concludes that the equity incentive plan helps companies improve financial performance,reduce agency costs,and enhance R&D capability to a certain extent,and summarizes the excellent experiences in program design,such as companies have formed a good equity incentive culture by launching several plans in a row,and the use of restricted stock model with multiple unlocking periods in the incentive program promotes the incentive effect.However,there are also problems in several incentive plans,such as inappropriate timing of implementation and unreasonable performance assessment targets.This paper puts forward suggestions to determine the timing of introduction,scientifically estimate the growth potential of enterprise performance and set diversified assessment targets by combining internal and external environment,which is expected to provide some reference for Company B and enterprises in the same industry.