| The separation of ownership from administration in modern corporations results in the conflicts of interests between owners and managers. In order to drive up managers effectively, owners should establish close relationship between managers'interests and corporations'performance with compensation scheme. Stock option is an incentive system prevailing among enterprises in the western countries. Through many years'fulfillment, it has been proved that stock option can effectively encourage managers. However,the events of account-manipulate in the U.S. listed companies tell people that there must be some defects in it. This paper studies the stock option, especially its internal defects and optimal design, which will contribute to the perfection of the incentive system of stock option and its popularization in our country. Firstly, this paper compares the stock option with other compensative tools in incentive characters, such as incentive basis, incentive timing, incentive intensity and incentive symmetry, and draws a conclusion that the stock option is better than other compensative tools. Secondly, by analyzing the incentive principle and effect of the stock option, the author finds the reason resulted in defects that the system of the stock option takes the stock-price as the basis of the encouragement and the performance evaluation, and verifies the problems appeared in the application by the cases. Thirdly, the author puts forward some proposals, such as introducing the reasonable method of performance measurement and adjusting the stock-price; especially setting up the bonus pool and the incentive coefficient based on EVA (Economic Value Added) to optimize the beneficiary's income model so as to overcoming the internal defects by uniting the performance measurement, policy-making and bonus plan together. Finally, the author thinks the perfection of the external environment is the important guarantee to perform the system of stock option successfully in our country. |
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