Comparative Research Of Stock And Stock Rights Systems Between America And China

With the in-depth SOE reforms in China, and the exposure from the china market to the international market after the WTO entry, the restructuring of the SOEs and the strategic reengineering have become the first priority. The development of the policy of American stock options has demonstrated that we can only settle the motivation issue after we research the stock option under the frameworks of the corporate governance and increased market value of the enterprise. Meanwhile, from the technical point of view, we can settle the problems on how to design the most appropriate stock options for employees. The article will start from the theory of the stock option, illustrating that the stock option is the kind of contract to obtain a right to purchase or sell a certain stocks within a certain period. Analyzing from the original purpose of designing the stock options, "design to minimize the moral hazard of the senior management, in order to motivate them to perform," and the basic concepts of the stock option system, which is theory of labor value by Max, and the agency theory, which is the advanced western theory of Human Capital, we can conclude that, in order to solve the problem of long term motivation, at least in a certain long term period to settle the agency problem should be stock option plans for managers. To be more important, it should be the stock option plans designed for all the employees.Since the introduction of stock option, its motivation effects have been demonstrated. The article takes US as an example, from analyzing the history and the development of the American stock options system, illustrating the purpose of promoting the stock option plans is to connect the benefits of the employees with those of the investors. Therefore, both parties can reach to the agreement, which is obviously beneficial to inspire the employee's self-initiatives, and invite more of its enthusiasm to create more values for the company. We all understand that investors pay more attention to the long-term benefits, and employees who are employed by the employer or the investor pay more attention to the short-term operation profits. Therefore, compensating employees with stock options can connect long-term returns together with the short-term profits. On the other hand, since stock options target at long-term returns, it can retain the high performer and those with good capability, furthermore, and it can help avoid other companies steal your key staff. Stock options therefore have been attractive for many companies.The American stock option system includes the types and the benefactors of the stock options, its origin, granting timelines, expenses, and number of grants, vesting period, and the daily operation of the stock option plans. Such a stock option plan not only can ease the conflicts between employer and employees, providing long-term motivation tools, but also can enlarge the individual investments to the companies so as to realize the diversification of the investors. It is an effective way to solve the problem of short of capital. Therefore, implementing the stock option plans is one of the major tools to optimize the motivation and incentive systems in SOEs. By illustrating the background, benefits, effects, problems of implementing stock option plans, by holding the stocks of the company, employees can enjoy the operating profits and the added value of the capital. It can obtain some extra earnings besides the income, and at the same time, decreasing the tax, enhance the team building and participating awareness. To be more important, by holding the stock option, employees can become the investors. Although stock option system is one of the effective motivation tools, and has been widely accepted by the developed countries, a good number of financial crisis and scandals in US strongly challenges its effectiveness of such a system. First, the decentration of the shareholders cause the absence of the active investors, none is willing to implement the rights of the shareholders by rep...