The Manager's Incentive Stock And Future Stock Option

To stimulate the manager's enthusiasm of the state-owned enterprises in China, the government has readjusted the salary distribution system in the state-owned enterprises several times since the reform and opening of the nation. These changes have been made from the original contract responsibility system, asset responsibility system for operation, leasing system, agency by agreement to the yearly salary since 1994. The results of these readjustments have not satisfying according to the practical effect of the systems, for they never really tie up the interests of the managers and the enterprises. As the value of manager's human resources varies, there is a need of a new system to ensure the manager's access to property right, thus fully embody the worth of human resources under the principle of efficiency priority and equal consideration. Therefore it's very necessary to put incentive stock and future stock policy into use among the senior administrative personnel in those high-tech companies. A separating tendency between the owners and runners appeared in big companies all over the world in 1970's. Many American companies adopted incentive stock and future stock option in order to solve the problem of entrusting and commission and to manage and stimulate the company administrative personnel properly. Under American's influence, many developing countries established or perfected their stock system, which makes it an important excitation mechanism in companies all over the world.This paper, based on China's actual situation, analyses the problems existing in state-owned enterprises from historical and developing perspective, makes inquiry into the ways of long-range development, and proposes viewpoints and ways which are suitable to promote stock.The paper can be divided into six parts:Part 1. IntroductionThis part introduces the background, purpose and significance of the research. A general survey of theory and practice in stock and its principle of the manager is discussed. Also the thought, research methods and possible innovations are made clear here.Part 2. Basic theory in manager's incentive stockThis part analyses the impacts of changes inside and outside of the enterprise to human resources in the enterprise. The systematic structure and patterns of enterprise's reward system - an incentive and compensation methodfor personnel capital also changes. According to the research, in order to attain a long-term efficiency, new incentive ways and means for the enterprises has to be found in incentive stock together with the traditional payment and promotion system. It is also pointed out that contribution theory, entrustment cost theory, and incentive theory and secondary theory of personnel capital are the major theoretical cornerstones to the stock incentive for the manager. Part 3. Analysis of problems related with incentive stock The commonly used 10 international incentive ways are illustrated here, a profound analysis and research of the policy and its operation of the current Chinese incentive system is made, and the viewpoint that incentive stock can reduce entrustment fees, raise stock efficiency, build up investors confidence, stabilize and attractive best talents and take preventive caution against corruption is proposed.Part 4. Study on theory and feasibility of stock and bill operation This part elaborates on the planed concept, incentive, content and theoretical basis of stock and bill, its relationship with manager's incentive in state-owned enterprise, and a theoretical analysis of the necessity of practicing manager's stock and bill. It is pointed out that two obstacles existing in current practice of Chinese manager's stock and bill, one is the imperfect structure of the enterprise and the other is the absence of background to establish manager's stock and bill system.Part 5. Case study of stock incentiveThrough the data collection of the representative listed enterprises and quantitative and qualitative analysis of correlations between the senior manager's stoc...