Legal Analysis On Stock Option

Since Feizeer Corporation put forward Stock Options plan in order to dodge tax in 1952, Stock Option system has become an effective stimulation mechanism in industrialized country as a supplement of traditional stipend system. As a paying system used to encourage managers, Stock Option uses the price difference resulting from the stock appreciation as compensation for manpower capital of the company manager, and combines the self-goal of the manager with the long-term interests of the company successfully.This article elaborates the meaning and legal nature of Stock Option, analyzes the legal obstacles of carrying out Stock Option in china. Combined with our practices on trial, this article deals with some related issues on carrying out Stock Option. In conclusion, Chinese Company Law and Securities Law should be revised to solve the problem of stock sources and the encash of stock interests and so on. The special legal system of stock options should be established. Tax law should be revised to make the manager benefit from it. The accounting statute to match with stock options should be established. It is expected that the system of Stock Option be operated perfectly in native environment.