The Theory And Analytic Demonstration Of ESO

After china's entry into WTO (World Trade Organization), companies in China will stay inferior to the counterparts of foreign countries in the contest of talents.In order to attract and obtain talents, we must found fine incentive systems. Executive Stock Options (ESO) is a kind of incentive mode, which has been widely used in western developed countries. In the largest corporations in the U.S.A, 50% of the president's income and 30% that of other senior managers comes from stock option and stock donation are also nearly up to 50% in the reward of the directors. At present, 13% of floating stock in 200 top listed companies in the U.S.A has been used in incentive to mangers. Which in our country, incentive of stock options is still in probing period, the representatives of which belong to the mode in Shanghai, Wuhan and Beijing. How to creationarily use such incentive mode will have great effect on the further development of the corporations in China.ESO means that in a certain given period, executives have rights to buy a certain number of stocks in their own companies in a certain period. The essence of incentives is to make managers obtain part of stock ownership by means of that, and own claim to surplus value of the company as well.To execute ESO can constantly attract and stabilize excellent talents, don't cause capital drain when improving income of the managers, can reduce agent-cost, and can also rectify the near-sighted behavior of the managers. But there are still some limitations in ESO. The first is that the price obviously changes with the fluctuation of stock market. The second is that it's difficult to confirm reasonable exercise price of stock options in non-listed companies. We will meet some problems, when carrying out ESO, that is, distortion of stock market, unsanitied rules and law and unperfect managers market.The purpose of the paper just lies in: on the basis of fully study foreign ripe experience, relate to our country's situation, overcome some obstacles and construct ESO systems with Chinese characteristics.The thesis has six chapters, not including forward. We can also divide the whole paper into 3 parts in accordance with consecution.Part â…  (Chapter 2 and 3) takes the U.S.A as an example, introduces the concept, history and theory basis, and generalize the kinds of ESO.Part â…¡ (Chapter 4) mainly studies and analyses the executive details of ESO in the U.S.A, select some successful cases on the basis of which evaluate its executive effect, and the paper gives us some useful enlightenments.Part â…¢ (Chapter 5, 6and 7) is the best important part. This part mainly gives us some brief introduction to other incentive of stock ownership, gives us the similarities and differences between incentive of ESO and other stock ownership in comparative method, analyses executive condition of stock option plans in China and their own character and on the basis of this, this part puts forward founding frame of incentive of ESO systems with Chinese characteristics. The thesis is based on the experience of attending the research task on the incentive of stock ownership in Ningbo city, and the paper gives us a brief summary to the task.