Research On Relative Problems To Executive Stock Option

As a solution of the problem of long term incentive system of "Trust — Agency" contradiction, reward and risk symmetry executive option system becomes more and more concerned about by the investors, economists and financial experts.In China, for quite a long time, the reward of the manager is independent of the firm's revenue.The interest of the manager can not be protected, which sharps the contradiction of " Trust — Agency" ,harms share-holder's interest. And, the firm lost the internal power of development now, to set up a complete inspiration system is an important step to the firm's reformation in China.This paper is consisted of six parts. Chapter I, Introduction. In this chapter, the author puts forword the main contents and meaning of the paper, at the same time, the researcher talks the practice and theory foreign country and China about ESO. Chapter II, this part tries to set forth that stock option adapt to manager and kernel problem and try to establish the model to quantize the optimal stock on the problem of the price and the quantity of stock. Chapter III, this part discusses the problem of second fix price on Executive Stock Option, and it systematically analyze the effect both positive side and nagative side ,meantime,the auther points out concerned views on whether to have the second fix price on Executive Stock Option. Chapter IV deals with the value evaluation of executive stock option, first, the author discusses the value of executive stock option from share-holder and manager's point of view and point out the important difference, simultaneously, it discusses two evaluation methods on share-holder's side ,irrelevant method and relavant method, this paper also make same research on manager's utility method and definite equivalence method on manager's side, and, finally it is the evaluation of two non-standard executive options. Chapter V and VI, the recognition and measure of ESO, although the issue ESO is a kind of capital transation, it doesn't cause liability, neither reduces equity, but the researcher believes that reward cost of ESO should be recognized. In addition, the author believes that accounting measurement dateof the first value on ESO is donation's date, but the recognition of reward cost should be executive's date.