Design Of Optimal Equity Incentive Contract In Modern Enterprise Regime Framwork

This is a paper concentrating on how to improve corporate governance through share incentive. The background is that the modern enterprise institution has not fully established although economical reform of China has lasted for more than twenties years. And share incentive is among the mam measures to improve corporate through the re-designing of equity contract.This paper includes three parts or thirteen chapters in terms of chapter.The first part is the theoretical basis of this paper. This part focuses on four topics. The first is the development of agent theory. The second is the development of incentive theory. The third is the development of human resource theory. The last is the influence of share incentive on agent cost.The second part focuses on the application of share incentive in western countries. This part includes four topics. The first is the application of ESOP. The second is the application of stock options. The third is the application of MBO.The last is an analysis of disadvantage of share incentive in western countries.The third part focuses on the application of share incentive in China. This part includes four topics. The first part is the application of ESOP in China. The second topic is the application of stock options. The second topic is the application of MBO in China. The last is a research on how to design the best share incentive contract.The methods this paper adopts include the method of game research,the method of contract, the method of quantity, the method or comparison. And the theoretical basis includes agent theory, option theory and enterprise theory. Through the systematic application of these theories, the author has drawn many meaningful conclusions, which can guide the practice of companies in China.