Research On The Management Behavior Of Earnings Management Of Listed Companies In The Pharmaceutical Industry Under The Equity Incentive

The equity incentive solves the principal-agent problem arising from the information asymmetry between the shareholders and managers of the company to a certain extent,but in the meantime,the set of terms relating to equity incentive scheme will leave some space to management earnings management behavior,make its produce earnings management motivations for earnings management.The pharmaceutical manufacturing industry is an industry integrating talents,knowledge and technology.Its development is crucial to the national economy and people's livelihood,and the equity incentive for its managers helps to retain core r&d personnel and senior management talents.In order to adapt to the characteristics of high r&d and high investment,the equity incentive scheme of pharmaceutical manufacturing listed companies has its own characteristics in setting.Therefore,in such an equity incentive arrangement,the administrator will generate a certain surplus management motivation in order to ensure the realization of its own interests,and take corresponding surplus management measures for surplus management.Based on the relevant literature and theoretical basis of equity incentive and earnings management,this paper analyzes the equity incentive situation of listed companies in pharmaceutical manufacturing industry and analyzes the current situation of earnings management under the equity incentive.Based on the analysis of the Hua Lan biology limited company as the actual case study object,this paper firstly introduces the background of the case and the main content of the equity incentive plan,then analyzes the motivation of its management to generate earnings management,and USES the surplus management method to carry out earnings management,and then analyzes the effect and influence of the earnings management behavior on the company's performance and market effect.The following conclusions are drawn from the analysis: first,the specific provision of the equity incentive plan will leave room for management to manage the surplus and generate a surplus management motivation.Second,pharmaceutical manufacturing industry is a combination of traditional industries and high-tech industries,and requires a large amount of r&d investment.The management of enterprises may conduct earnings management through the use of tax incentives,capitalization of r&d investment,and reduction of non-recurrent profit and loss.Third,equity incentive to really play a role of management incentive and constraint,the incentives need to be more strict and diversification,awarded quantity reasonable fairness,incentive characteristics been valid for a longer period,the company after the implementation of equity incentive management produce earnings management motivation,and adopt a certain surplus management means of earnings management behavior,company itself and the government should take some measures to protect the effective operation of the company equity incentive plan.In the end,this is a piece of advice about how to design and manage the management's surplus management in the design of the optimization incentive scheme and the stock options.