Chinese Listed Company Executives' Equity Incentives

The primary goal of exeutive equity incentive is to align the interests of management with those of shareholders and to incentivize management to manximize shareholder wealth and socital value. The lack of long term incentive scheme for management of Chinese listed companies highlights the need for equity incentive.From a global perspetive, equity-based pay has been the engine for economic growth in US over the last decade. However, the explosive growth in US CEO's equity based pay in the late 90's of last century has put the equity based pay under fire. Academicans, government and market are undertaking review of the equity incentive's role in corporate governance. Therefore, it is of high importance to research equity incentive in China in light of the US practicee in the 80-90's last century.The paper attempts to explore 4 issues : (1) practices and lessons of equity incentive at home and abroad; (2) economic analysis of equity incentive effects in China; (3) institutional environment for equity incentive in China; (4) design for China's equity incentive mechanisms. The paper consists of 9 chapters , are 120,000 words long and can be divided into 3 parts. The first part , including Chapter 2 and 3 , overviews theroetic literature and golobal development of equity incentive. The second part, including chapter 4 and 5, describes the current state of equity based pay in China and undertakes an economic anlaysis of equtiy incentive effects . The third part is institutional environment and design of China executive equity incentive mechanism. Chaper 6 talkes about the institutioanl envornment. Chapter 7, 8 and 9 discuss executive stock option, managerial ownership and managemnt buyout.