The Impact Of Different Equity Incentives On The Innovation Performance Of Pharmaceutical Companies

Innovation development is the key to the current global competition and an important driving force for the long-term development of the national economy.In order to cope with the changes in the pharmaceutical market and the new situation of global pharmaceutical innovation,pharmaceutical companies are vigorously upgrading their innovative technologies,absorbing technical personnel,adjusting the structure of R&D personnel and promoting the growth of output value.However,the innovation R&D of pharmaceutical companies is characterized by long investment period,high risk,and the phenomenon of proxy,which will lead to the inefficiency of company’s R&D and thus waste of capital.In this context,equity incentive has become a way to alleviate the principal-agent problem for more and more pharmaceutical companies,hoping to enhance the enthusiasm of executives and technicians for innovation work.Based on this,this paper focuses on the impact of equity incentives on innovation performance.The purpose of the article is to explore the far-reaching impact of equity incentives on corporate innovation performance from multiple perspectives,taking Tigermed and Kolon Pharmaceuticals as examples.Firstly,this article will define the theoretical basis of equity,then,it will introduce in detail the different equity incentive programs of Tigermedicine and Kealen Pharmaceuticals and summarize their implementation characteristics in order to provide a strong basis for the subsequent case data analysis.The article delves into the far-reaching impacts of the two equity incentive models,employee stock ownership plan and restricted stock,on Tigermed and Kealen Pharmaceuticals companies,and analyzes the changes of indicators in three stages as a way to compare the similarities and differences between them.Through the comparison,the far-reaching impacts of different equity incentive programs on the companies can be better understood and thus better motivated for the development of the companies.Ultimately,conclusions are drawn from the case study and recommendations are provided for pharmaceutical companies.The incentive methods used should be different for different employees.For corporate executives,the incentive effect of restricted stock is relatively better,while employee stock ownership plan can be used as an incentive of welfare nature,when a broader category of incentive recipients and the number of incentive recipients are involved.Unreasonable performance indicators have a significant negative impact on innovation performance.Therefore,pharmaceutical companies should adopt different incentive methods according to the needs of different corporate incentive targets,develop a continuous equity incentive plan,and standardize corporate and individual performance assessment and evaluation indicators,so as to optimize internal resources more,promote the conversion of economic benefits of technological innovation results,and promote product transformation and upgrading.