Selection Of Equity Incentive Scheme Based On The Effect Of Individual Tax

In the process of enterprise’s gradual modernization,the separation of power system between enterprise owners and management has gradually been recognized by the market,and the resulting conflicts of interest and agency conflicts have also been closely concerned by scholars.Equity incentives have been seen an effective means to alleviate this problem.For the owner of the enterprise,how to choose a suitable incentive plan to achieve a win-win situation between the company and the management and maximize the effect of incentives is the problem that this paper will discuss.In the modern market economy,the tax environment and system,as one of the important external environments,will have a profound impact on the company’s strategic decisions.Therefore,when designing an equity incentive plan,factors of the tax system should be taken into consideration.This paper focuses on how enterprises should connect with the actual situation in the context of the existing tax system to reasonably select and design the equity incentive plan,so as to better match the needs of corporate governance and achieve their own business objectives.The pharmaceutical manufacturing industry where Beida Pharmaceutical is located is developing rapidly,while the competition is also very fierce.Enterprises need to implement measures to retain outstanding talents and send positive signals to the market.Therefore,Beida Pharmaceutical launched the equity incentive plan in 2018.This paper focuses on the study of the stock option plan of Betta Pharmaceuticals in combination with individual tax effects and puts forward related suggestions,hoping to inspire Betta Pharmaceuticals and other companies that are planning to implement equity incentives.This article first introduces the background of the case of Beida Pharmaceutical,including the development status of China’s pharmaceutical manufacturing industry,the basic financial situation of Beida Pharmaceutical,and then briefly summarizes its equity incentive plan,namely,stock options,and combs the implementation motivation,incentive objects,and specific content of equity incentive of Beida Pharmaceutical.Then the case analysis method is used to analyze the incentive plan of Beida Pharmaceutical from multiple perspectives based on the individual income tax effect,so as to provide some suggestions for enterprises on how to choose the equity incentive plan.The equity incentive plan should naturally meet the relevant needs of enterprises,but also pay attention to the incentive effect,in which the individual tax is a factor that is easily ignored but cannot be underestimated.Therefore,this paper makes an in-depth analysis of the individual income tax burden and risk of the incentive objects,studies the relevant impact on the individual income tax situation of the incentive objects from three dimensions: different incentive tools,before and after the individual income tax reform,and different incentive objects,and finally gives corresponding conclusions and suggestions.