Risk Of The Stock-Based Incentive: The Lessons On Manager Stock Options In American In Recent Years

In modern enterprise management, the ownership and the management are separate and it arises the question of submit and surrogate, which bring on the managers` moral risk and a large waste of companies` resourse.. In theoretical study and practise, the incentive stock options system was once regarded as a right key to the question, which has developed quickly in recent twenty years and are respected in the enterprise of west countries. In China, national securities supervise committee released a criterion called"Public Companies Stock-based Incentive Management Measures"(implemented from 2006.1.1) ,the criterion allowed the public companies which has completed the equity diversion reform to use the stock-based incentive, and regulate the implementation procedures and information disclosure.When the stock options may be used abroad in our country, we should notice that the ues of stock options in American is for a long time, and the result of the practise showed the problems in the stock options, the managers riched themselve by stock options without bring the company the same benefit. Furthermore, the notorious finance scandals in the American companies such as ARON and WORLDCOM were caused partly by the stock options. For this, we have to study on the experience of American companies, and learn their lessons.According to the use of stock options in American, we found that the use of stock options made the manager compensation more complex, and the principle of"pay for perfprmance"might meet questions in the practise. There are risks exist in the opration of stock options, which may cause the effect of incentive distort. Which caused the risks, the design or the decision-making? From the experience of America, we can judge it is the latter,so it come down to the company govern. In China ,the use of stock options cann`t be blind, we must take care of the risk and learned American`s lessons, never go the same wrong way.