Case Study On Equity Incentive Of Kunming Pharmaceutical Group

With the separation of ownership and management of corporate and the agency problem become an important issue in corporate governance,the equity incentive which has unique feature become the basic way and method to solve the agency problem.In western countries,equity incentive has long been popular.In china,the application of the equity incentive in our country is relatively hysteretic:equity incentive hasn't been widely used until the 1990's.At the beginning of equity incentive used in China,the design of equity incentive were special such as wuhan pattern,Shanghai pattern and shenzhen pattern.They were failed to cover China due to its rigorous regulation and weak incentive.Since entering the new century,equity incentive began to really catch on with the development of law.The equity incentive plan of Kunming group is carried out in this background.The management group got the corresponding restricted stock in 2013,2014,2015 because their fruitul work.The result appears to be happy: company complete scheduled performance and the management group won the lucrative earnings management.But,is it possible phenomenon that mamagement grope get interest through the opportunism behavior?In this paper,author study the equity incentive program of Kunming Pharmaceutical Group,try to get the conclusion if the equity incentive program design is reasonable,if there is the good financial changes in the process of equity incentive and if management group get improper interest through the opportunist behavior which is harmful to the interests of external investors.First of all,author analyzes the research background and research significance of this paper and summarizes the research on opportunistic behavior in equity incentive and equity incentive of domestic and foreign scholars.Secondly,author summarizes the related concepts and theories used in this paper,and then author use the financial index method to analyze the company's financial situation to study the financial situation of the company's financial situation,and then use the financial index method to analyze the financial situation of the company,Equity incentive to the company's financial indicators;and then,combined with financial indicators and other data found that the company's management in the equity incentive in the existence of improper profit behavior.Finally,the author summarizes the conclusion of this paper,first of all,there is a certain problem in the design of incentive scheme.Secondly,the equity incentive of Kunming Pharmaceutical Group has improved the financial status of the enterprise,and has not taken dividend distribution policy in the process of equity incentive Infringement of the interests of external investors,but in the process of implementation of equity incentives in the management of opportunistic behavior:by adjusting the way the bad debts of the company's profits.Then,the relevant suggestions are listed: the development of more reasonable and perfect incentive system;in the internal system construction,optimize the internal management mechanism to improve the relevant information disclosure standards;in the external market environment construction,should establish a sound Capital market,improve the equity incentive of the relevant laws and regulations,in addition,should also strengthen the manager market construction.