Study On Executive Stock Options

With the development of modern economy, the scale of enterprises is becoming larger and larger, which leads to a striking character of these enterprises: the separation of ownership and administrative right. The enterprise is owned by the shareholders but is operated and controlled by the manager. The manager may make decisions that will deviate from the benefits of the owners because of their different aims. And this economic phenomenon is called principal-agent problem. In order to solve this problem, it is very important to establish the incentive system for the manager, and the Executive Stock Options (ESO) is the optimize module. In the thesis, by adopting positive and normative analysis, qualitative and quantitative analysis simultaneously, the author designs a ESO plan to adjust the situation of China and then puts forward many measures concerned.This thesis consists of five sections:Section one, introduction. In this section, the author outlines the economic background, the purpose and the significance of this study.Section two, the theoretical basis of ESO. The essence of ESO is to let the manager have the residual claims and accept the corresponding risk. The author uses the principal-agent theory and the human resource theory as the theoretical basis of this study.Section three, the present situation of ESO in our country and at abroad and the enlightenments of it. Firstly, the author adopts positive methods to describe the present situation of ESO in USA, Europe and Japan. Then the author introduces three modules of ESO in China: Beijing Module, Shanghai Module, Wuhan Module. Finally, the enlightenments are concluded by comparing the situation of ESO in China and at abroad.Section four, the design of the ESO plan. In this section, the author firstly sets forth the design procedure and the basic operation points of the ESO plan. The plan mainly includes the object scope, the opportunity, the number and the price to exercise the rights, the source of the stock needed and the charge of ESO etc. Then the author designs an effective plan for the listed companies in China. Finally, the author analyses the effects of implementing ESO.Section five, the study of the compliment measures to enforce ESO in our country. There are many problems in implementing ESO in china at present and the author puts forward some corresponding measures to resolve these problems to ensure its efficiency.