Study On Effects And Influencing Factors Of Executive Stock Option In Chinese Listed Company

Acting as an important means of solving principal-agent problems in modem enterprise, stock incentive has been proved can effectively improve companies performance and accelerate economic development. Despite early seeking after equity incentive in the 1990s, the incentive effect was not obvious because of lack of policy. Therefore many people had questioned and doubted the equity incentives in China and there is no breakthrough in equity incentive. However, equity incentives environment has been improved, along with the reform of split share structure in 2005 and issuance of the relevant laws and regulations. A great number of companies in Shanghai stock market, Shenzhen stock market and the growth enterprise market implemented the stock option incentive to incite the managers.The article's purpose is to reveal performance effect of stock option plan in listed company through empirical study. Based on the review of related literature, parse of theory of stock option and method, the paper take the listed companies for sample which have completed the split share reform in Shanghai and Shenzhen stock exchanges during 2006 to 2011. First, the paper studys on the correlation between the performance and ESO by methods of multiple factors linear regression, and the result show that the earnings per share and return on assets were positively related to the level of stock option incentives. But the result is not significant. To explain the result, the paper correlates the value of listed company with the accounting information, study on the high-tech enterprise and test the effect of board of compensation.The result has show that when the performce of company is standed for by ROE, EPS and Tobin'Q separately, the effect of stock option plan is negative correlated with the performance of the listed companies in China, choosing the capital strcture, the size of company, the growth of company and concentration of ownership to be controlling variables. There are three reasons for the result. Firstly, the stock market is thought not effective in China by the positive analysis of the correlation between the values of corporation and the accounting information. Secondly, the board of compensation of listed companies and stock option plan is not significant correlation. It means that the board of compensation doesn't work effectively to establish the stock option plan. Finally, the performance of hi-tech listed companies and shares incentive is not significantly correlated, because of the lack of perfect policy, regulation and method.