A Case Study Of Lizvon Group Equity Incentive

Nowadays,the primary problem of corporate goverance is the issue of agency between owners and operators caused by the separation of the two rights.In this context,equity incentives came into being.It has become an important measure to solve this problem and promote the positive development of enterprises.In 2005,China launched the reform of the assorted shareholders.The equity incentive has gradually been applied in China,and it has played a positive role in solving the problem of principal-agent,but there are still some immature places.Further research on equity incentives has practical significance for Chinese companies to make equity incentives play an even greater role.This paper first summarizes the relevant theories,analyzes the characteristics of the pharmaceutical industry and the implementation status of the equity incentives,and then compares the similarities and differences between the two markets in the equity incentive system.Based on this,the case study and data description method are used to analyze the equity incentive of Livzon Group.To analyzes the effect of Livzon Group's equity incentive,this paper compares the performance of this enterprise before and after this equity incentive by using CARs model and Economic Value Added,which would make the comparation more precise and integrated from the perspective of both short-term performance and long-term performance and financial indicators and non-financial indicators.Here are the conclusions: First,the A-share market has stricter requirements on whether the enterprise equity incentives can be implemented,however the H-share market is more strict in the implementation process;Second,the equity incentives for the pharmaceutical companies play the most obvious role on improving their R&D ability and retaining talents,but the promotion effect on other indicators is not obvious;Third,the author believes that pharmaceutical companies should set suitable conditions to meet their own company's characteristic,add market indicators into assessment indicators and make assessment indicators become more diversified at the same time.