The Study On The Stock Option Incentive System With EVA

In order to solute the agency problem between the Shareholders and managers in modern enterprise, In the fully mobilize the enthusiasm of the operators, while safeguarding the interests of shareholders, many listed companies began to put the equity incentive system in practice, especially after the split share structure reform in China ,the stock option incentive have become more pursuit. However, In the executive process of this system, some wraps appeared between the theory and practice, there have been many problems in stock option incentive system which need to be solved, one of the most important problem is how to determine the performance assessment guideline for the managers.In this essay, first, I describe the theoretical and internal factors of stock option incentive system, second I not only point out the design defects of management performance evaluation system, but also analyze its current drawbacks and non-adaptive. At last, according to the theoretical research and practical experienceDomestically and overseas. EVA is a scientific and reasonable Performance assessment guideline. The issue is on the ground of the trend for equity incentive system and EVA basis is outstand among many kinds of options, it is the best method to explain the process of increasing the shareholder's value within all the financial assessment guidelines. Second, .It is a long-term incentive approach that makes the personal interests and the interests of enterprises be linked to stimulate the operators to enhance long-term value to increase their own wealth. Third, at the base of EVA, enhance the relationship between management ownership and operating performance (EVA),as well as strengthening the relationship among managers, shareholders, and companies. Finally, authors point out the shortcomings of this study and further research directions.