Case Study Of SNY's Equity Incentive Plan

Since 2006,China's securities regulatory commission(CSRC)has issued an equity incentive management method,and the equity incentive has been in China for a decade.Equity incentive has brought new vitality to the reform of the governance model and salary system of listed companies.Equity incentive is a way for enterprises to implement long-term incentive for employees.In some conditions,the company gives employees a stake in the company,which is an option incentive.Before the ownership incentive method,the enterprise is to determine the manager's income through the assessment of the target performance,this kind of incentive is closely related to the short-term performance of managers,which is not conducive to the long-term development of the enterprise.The emergence of equity incentive schemes can avoid managers' excessive emphasis on short-term corporate goals,which means managers can share the surplus value of the enterprise.Equity incentive plan is helpful to guide managers to make decisions on the long-term development of enterprises.Since the China securities regulatory commission issued relevant measures on equity incentive management in 2006,listed companies have actively pursued equity incentive policies.However,there are some drawbacks in the implementation process,there are still some problems in the pricing of equity incentive,the setting of assessment indicators,internal supervision and external supervision.In this paper,we take SNY as the research case and analyze the reasons for the failure of SNY's three equity incentives,using relevant theories and using the relevant experience of successfully implementing equity incentive enterprises,according to the problems existing in the three equity incentive schemes of SNY,this paper puts forward reasonable improvement suggestions in the four aspects of incentive mode,incentive object,assessment index,and right price,we hope to provide reference for SNY to make another equity incentive plan.At the same time,we hope to provide some reference for other enterprises to implement equity incentive plan,so as to provide some help to improve the construction of equity incentive system in our country.