Research On Problems And Solutions Of Yiling Pharmaceutical Equity Ownership

With the development of modern enterprise system,ownership and management are Separated,Principal-agent problems gradually appear.Principal-agent theory put forward that the effectively way to solve the above contradiction is incentives to managers and setting restrictions on the operator's contract.The effective way to link the interests of managers and owners is equity incentive.Equity incentive is the most effective solution to the conflict between the two objectives to promote enterprise value maximization.Nowadays,it is very common for enterprises in developed countries in the world to use equity incentives.Equity incentive design is mature and the implementation effect is also increasingly improved.China's enterprise equity incentive appears late.The change from planned economy to market economy,making equity incentive began to germinate.The landmark event was the reform of the ownership structure of the State Council in April 29th 2005.Before the reform,there were circulating shares and non-tradable shares in the stock market.,which hindered the development of the stock market.After the reform,it adapted to the new situation of China's economic development and laid the groundwork for the promotion of equity incentives.With the continuous practice of enterprises,govemment regulation and the correct guidance of the market,the form of equity incentive is gradually diversified,implementation effect is gradually improved.Under the background of equity incentive in our country,pointing out the research purpose and research significance.l study a large number of domestic and foreign article.Based on the concepts and theoretical basis of equity incentive,I select YiLing Pharmaceutical company as a case study.Research the share price changes before and after the implementation of equity incentive.Study financial status of YiLing Pharmaceutical company.Calculate solvency,operational capacity,profit ability,growth financial indicators.Choose four industry competitors for financial comparison.Then discover the design issues.Combine of the problems and causes of the problem,I summarize the corresponding countermeasures.lt also provides reference value for listed companies and other small and medium-sized enterprises iin China's pharmaceutical industry.Finally,it summarizes and points out the limitations of research and future research directions.Through research,this paper draws the following conclusions.(1)Yiling Pharmaceutical's equity incentive design has the following advantages worth learning.Adopt two incentive modes,the stock option incentive and restricted stock incentive.The quantity that adopt two incentive models at the same time in our country is small.Restrictions on the lock-up period drives the interests between the management and corporate shareholders closely together.It eased the poison capsule incident to the business blow.It also solved the problem of insufficient management motivation over the past decades.Through the business situation of the past three years,the equity incentive is successful.(2)0f course,there are disadvantages and shortcomings.limitation of motivation,the performance evaluation assessment system is not perfect,assessment indicators are too single,the exercise price is set too low,duration and ratio of exercise is not perfect.(3)Several suggestions are put forward to improve the problems that arise.expand the scope of incentive and incentive object distribution,reasonably set performance appraisal system and exercise conditions,strengthen the internal corporate governance strmcture,improve the external environment for the implementation of enterprise equity incentive.