Research On The Relationship Between Equity Incentive Level And Equity Incentive Effect Of Bio-technological And Pharmaceutical Industry

Equity incentive is aim to incentive senior executives and core technical professors or other staff with core value by awarding them a number of corporation's own stock.On the one hand,the relevant staff can share the economic benefit when the stock price is rising.on the other hand,the relevant staff can vote for decision-making engaged in the management power and the control power under the modern corporate governance structure.In addition,it can ease the different goal pursuit and interest appeal between both principal and agent.As an effective corporate governance method,equity incentive has been developed and practiced for twenty years in our country.As high-technological industry,bio-technological and pharmaceutical industry is characterized by high technology,high growth and high market application which is beneficial for the use of equity incentive.Since the reform of non-tradable shares in 2005,more and more bio-technology and pharmaceutical company carry out equity incentive plan which has acquired fine effect.Based on this background,this paper select the date of bio-technological and pharmaceutical company which has implemented equity incentive from 2006 to 2016.Firstly,we analyzed and summarized the implementation situation about the equity incentive of the bio-technological and pharmaceutical by descriptive statistic analysis from these aspects as follows,year distribution of equity incentive;level distribution of equity incentive;the distribution between senior executives and core technical professionals;the source of stock;the conference mode of equity incentive;the duration dependence of the equity incentive.In this empirical research,we concluded the comprehensive performance indicator by factor analysis based on SPSS;we analyzed the significant differences between relevant indicators by independent-samples T test from the time latitude;we did partial correlation analysis between equity incentive level and comprehensive performance qualitatively;then we analyzed the relationship between the two by regression analysis quantificationally.What we find according to this research are as follows,implementing equity incentive can promote the growth of firm performance no matter the incentive object is senior executives or core technical professors.In addition,incentivizing senior executives can do better influence on firm for senior executives benefit the short-term performance while implementing equity incentive for core technical professors is beneficial for the long-term performance by regression analysis on the firm performance one year after and two year after.We also find that equity incentive boost the firm performance with some limitation,equity incentive with high level do not necessarily bring out the high-level growth of the firm performance and the equity incentive level should be controlled in a moderate range.In general,equity incentive play a positive guiding role in changing executives' operation model which turn the short-term performance pursuit to the long-term development.