A Case Study On Equity Incentive Of Fosun Medicine

At present,China's capital market is in the period of institutional construction.As an important long-term incentive mechanism,the equity incentive system of listed companies has been put on the agenda to improve the corporate governance structure of our country.On the premise of achieving the goal,the company manager obtains the income by buying or holding the stock right of the company and assumes the risk of the company operation.To a certain extent,the equity incentive reduces the agency cost.At the same time,it also avoids certain moral hazard.As the capital market itself is not mature enough,there are many deficiencies in corporate governance,which leads to a lot of problems arising from the rapid promotion of equity incentives.Therefore,in recent years,many scholars have carried out research in this field to bring more policy suggestions for the implementation of equity incentive plan.Based on the above background,through the form of case study,this paper makes a detailed analysis on the equity incentive of Fosun medicine.In the structure arrangement of the paper,it introduces the development and ownership structure of Fosun medicine in the case introduction part.Then it introduces the contents of Fosun's medical stock right incentive plan,including stock source,incentive object,exercise condition and the follow-up progress of stock right incentive,etc.Through the detailed introduction of the case,In the case analysis part,first of all,from the industry level,the company level analyzed the implementation of Fosun medicine two-phase equity incentive plan.This paper focuses on the impact of equity incentive on the short-term market reaction and long-term performance of the company as well as on the investment activities of the company to analyze the implementation effect of the equity incentive plan.This paper analyzes the advantages and disadvantages of the two-time stock right incentive plan of Fosun Medicine.The advantages are mainly that the exercise conditions are suitable to the nature of the enterprise,the exercise conditions are absolutely numerical,and the shortcomings are mainly the lack of non-financial indicators for the exercise conditions.The incentive period is short,the scope of incentive object is narrow,and so on.Then this paper puts forward some suggestions,including: designing scientific and reasonable equity incentive scheme,perfecting the internal institutional environment of the company.The conclusion and prospect of this paper are given.The analysis results show that the stock right incentive plan of Fosun Pharmaceutical has made positive response to the market in the short term,and in the long run,it has only had an impact on the profitability of the company.Equity incentives also have an impact on the company's investment activities,especially R & D investment.