Study Of Stock Incentive On Beijing Urban Construction Investment & Development Co., LTD

Learning from the experiences of incentive system of the stock option(SO) in other countries, based on the practical application in some domestic companies , and guided by the principle—agent theory, the theory on human capital, and the theory on financial option, according to Beijing Urban Construction Investment & Development Co.,LTD's (BUCID) conditions, this article make some rearch as follows:Analyze the yearly salary system adopted by BUCID at present, at the same time analyze incentive styles adopted by listed companies. Stock option is provided with long-term incentive and short-term incentive, asymmetry incentive, intense incentive, and then stock option is chosen as incentive tools to inspire BUCID's executive in this paper.Based on Beijing Urban Construction Investment & Development Co.,LTD's (BUCID) conditions, stock option value is simulated by black-scholes option pricing models and index option model. After comparing two option value types, stock option incentive which exercise price pricing by index option model embodys inspiration on individual performance which exceeds system performance, and then chose index option model to determine exercise price, which based on this model inspire BUCID's executive in this paper.Based on exercise price which pricing by index option pricing model and other incentive elements, BUCID's stock option incentive scheme is designed, and then it is proposed that we should widely adopt index option pricing model but not black-scholes option pricing model in listed companies' stock option incentive.