Research On The Implementation Effect Of Compound Equity Incentive

Equity incentive is a long-term incentive mechanism,which enables the operator to manage the enterprise from the perspective of the owner.According to the research report of RongZheng consulting,the total number of announcements of A-share equity incentive plan in 2018 reached 409,and more and more companies began to try the equity incentive mechanism,but in the same year,124 companies in the market issued the announcement to terminate the equity incentive plan.The rationality of the equity incentive plan is an important factor affecting the successful implementation of the equity incentive plan.Listed companies need to design the incentive modes,exercise conditions,incentive period and other contractual elements strictly according to the enterprise's development strategy and internal and external environment.In addition,due to the improvement of the equity incentive system and the diversification of the demand of listed companies,the compound equity incentive model came into being.The emergence of compound equity incentive model provides more options for listed companies.On May 9.2014,Tonghua Dongbao pharmaceutical co.LTD Announced the draft of the compound equity incentive plan,Tonghua Dongbao choose the stock option and restricted stock in the same incentive plan,restricted stock is lower than the proportion of stock option,The company hope to take advantage of these two kinds of incentive modes.Firstly,this paper sorts out relevant literature on equity incentive,and has a general understanding of domestic and foreign scholars' studies on equity incentive.In addition,it summarizes the development of compound equity incentive modes in China's market in terms of quantity,mode collocation and stock source.Secondly,based on the background and motivation of Tonghua Dongbao's equity incentive plan,Paper analyzes the rationality of the timing and elements of the company's equity incentive plan.Then it evaluates the incentive effect of this compound equity incentive plan from the aspects of market reaction,economic added value,financial performance,personnel stability and enterprise innovation ability.Through the analysis of various elements of the equity incentive and the evaluation of the incentive effect,the following conclusions are drawn: first of all,the design of the compound equity incentive scheme is reasonable,and there is still room for improvement in the design of some elements.Then,the incentive effect is good,the incentive object has overfulfilled the performance indicators,and the company has a good development prospect.At the same time,corresponding Suggestions are put forward for improvement.Firstly,equity incentive is not a master key.Affected by domestic macro policies and changes in the capital market,listed companies should use carefully the equity incentive mode in light of the actual situation of enterprises.Secondly,the design of specific elements should be motivated and constrainted.Based on the case study of TongHua Dongbao's compound equity incentive,this paper hopes to provide reference for other enterprises in the pharmaceutical industry when preparing to implement the compound equity incentive plan,and provide reference Suggestions for the evaluation of incentive effect by enterprise owners and investors.