Case Study Of Hengrui Medicine's Equity Incentive

With the rapid development of national economy,excellent enterprises in our country have risen one after another.Faced with the increasingly fierce market competition environment,the development of enterprises can not be separated from the joint efforts and efforts of upper and lower employees,fully mobilize the enthusiasm of employees,give full play to the ability of managers to make suggestions for enterprises,and make managers contribute to enterprises,which is an important driving force for the development of enterprises.In order to alleviate the principal-agent problem,modern enterprises usually use equity incentive plan to reward the core employees' performance,hoping to improve the performance of employees and maximize the value of enterprises through incentive compatibility,and then to close the interest relationship between shareholders and managers.Discussing how to make the equity incentive plan incentive compatible has certain significance.Hengrui Medicine Co.,Ltd.is the first Medicine R&D enterprise in China to apply personal performance appraisal to equity incentive plan.The relevant research on equity incentive plan can provide reference for other enterprises in China who need to implement equity incentive plan.Firstly,this paper defines the relevant concepts of equity incentive,reviews and combs the relevant theories,which provides a theoretical basis for the later research.Secondly,it makes statistics on the equity incentive plans of A-share listed companies in recent years,and understands the current situation of the implementation of equity incentive plans of A-share listed companies in recent years.Thirdly,it takes Hengrui Medicine as a typical case,based on Incentive compatibility.From the perspective of analysis of the implementation of equity incentive plan in Hengrui Medicine Company,the motivation of implementing equity incentive plan in Hengrui Medicine Company is discussed from resolving the contradiction between the two parties,reducing agency costs,retaining talents and stabilizing the staff,encouraging employees to improve their performance and maximizing the value of the enterprise.Finally,the motivation of implementing equity incentive plan in Hengrui Medicine Company is discussed from two aspects: The effect of equity incentive plan implemented by Hengrui Medicine Company was analyzed.This paper studies the implementation of equity incentive plan in Hengrui Medicine Company.Relevant conclusions are as follows: Firstly,in the modern enterprise system,the principal-agent problem is becoming more and more obvious.Rational application of incentive compatibility theory is the basis for Hengrui Medicine to implement equity incentive plan smoothly;secondly,Hengrui Medicine to implement equity incentive plan not only improves the performance of employees,but also maximizes the value of enterprises,achieves the expected purpose and effect,and also makes the market have.Third,Hengrui Medicine as a leading Medicine R&D and production industry,its successful and unique equity incentive plan is worth learning.The purpose of this paper is to study the motivation and effect of the implementation of equity incentive plan through the typical case of Hengrui Medicine,and to provide the basis for the decision-making of business operators and the formulation of relevant policies of government departments.