Research On Equity-based Incentive For Management Of Chinese State-owned Enterprises

Equity-based incentive for management has been popular in many countries (especially the USA) since start of their high-speed economic growth. It has been proved that equity-based incentive could greatly promote the efficiency of a company and accelerate the economic growth of a country. In a long period of term, Chinese state-owned enterprises are generally at a disadvantage of owner absence. How to establish the inspiriting and inhibiting system for management puzzled them all along. This problem is not only important in theory, but also important to practice.In this article, the author starts off from the management of Chinese state-owned enterprises and the special meaning of management equity-based incentive. Then this article makes a survey of the experience in developed countries. On basis of this, the author explores feasibility and operating points of equity-based incentive for management in Chinese state-owned-enterprises meanwhile, goes deep into the supporting policy and tries hard to find out the evolvement of it.In this article, the author tries to prove that the equity-based incentive for management of Chinese state-owned enterprises can help them to develop more healthily, along with the maturity of internal and external conditions. Trials should be made before the popularity of equity-based incentive for management, and different models should be chosen for different enterprises. The experience in authorizing, pricing, source and quantity of granted stock for equity-based incentive overseas can be learned to stimulate management without hurting the benefit of shareholders. In addition, the author discusses about the legal obstacles on equity-based incentive and makes suggestions in law of corporation and tax.In the exordium, the author reviews the theory on equity-based incentive. Then the author begins from the necessity of equity-based incentive for management in state-owned enterprises. The development and the experiences of equity-based incentive overseas are introduced in the second part. Thirdly, the author analyzes the feasibility of equity-based incentive in China. Suggestions about operation points of equity-based incentive for management of Chinese state-owned enterprises are made in the fourth part. At last, the author discusses some legal questions and policy about it.