Study Of Executive Stock Option Problem

In the modern enterprise contract theory, the owner and the manger set up a entrust-agent relation. Because of the information asymmetry, the stockholder cannot observe the degree of manager's effort and acquire the accurate information on production activities. The indirect appraisal index, for example output and profit are not necessarily consistent with manager's working hard because it are affected by other uncertain factors, so it is difficult for stockholder to rely on those index to have a scientific appraisal to work of manager, the manager also can attribute the bad result to uncertain factors, which cause so called agent cost .all the shareholder faces how to reduce the agent cost for the existence of entrust-agent relationship, contrast to the wage> bonus and other salary instruments , the stock option can connect the manager income with enterprise long term value, the reasonable stock option can effectively stimulate the manager to work hard to improve the long termPerformance of enterprise by market mechanism, and this will maximize the benefit of stockholder.Human resources is the important right body in the contract relation, with the improvement of its relative importance in capital structure, it is natural choice to participate the residual distribute.The human resources theory supply the theory foundation that manager participate in the residual distribute by the form of stock option.The article base on the entrust-agent and human resources theory and choose to the manager stock option as main research object. ,the paper analyze the theory and reality of stock option incentive mechanism under Chinese practical institution environment and strive to bring forward manager stock option incentive program suitable for Chinese company.The paper comprise three parts: the first part is the introduction, discussing the reason why choose the topic and the frame of the paper and summarizing the relevant theory and literatures on the topic.The second part comprises five chapters, the first chapter detail the definition -, development and incentive mechanisms of stock option, and discuss the necessity to introduce the stock option to manager salary structureThe second chapter will have a general objective analysis to the role of manager stock option in reality and caused dispute. Based on the contrast of all kind of salary instruments, stock option should play important part in manager salary structure. In order to realize the optimal incentive, the stockholder should fully make use of all kinds of salary instruments and combine them effectively, work out the optimal manager salary structure to maximize the benefit of shareholder. At last, incorporated with the demonstration analysis of manager income mechanism incentive intensity, the part draws the conclusion that manager should have a risky income besides fixed income, so the salary mechanisms will enhance the incentive role with the increase of rate of risky income in the whole income .The third chapter considers how the company governance mechanism affects the design of stock option instrument. The stock option institution is a important part of complete company governance mechanism, in another way, the role of the incentive mechanism rely on the constrain on manager by company governance mechanism. The first section has a general analysis to the relation between company governance mechanism and manager salary design. The second section briefly summary the present conditions of Chinese company governance mechanism, which may lead to all kinds of distortion when we design the stock option plan. The third section refers to some solution programs to company governance mechanism problem.The fourth chapter mainly set forth the relation between Chinese securities market environment .. relevant laws ^ taxation institution and stock option. The chapter also points out the disadvantage of these institution environments and brings forward some advice to make stock option play a more role in inspiring the manager.The fifth chapter...