Study On Equity Incentive Mechanism Of Listed Companies In China

As an important incentive mechanism for the modern enterprises, stock incentive mechanism had been an extensive application in the western developed country. In recent years, it had been accepted by some listed companies in our country. At the end of 2005, the Chinese Securities Supervisory Association had issued"Listed Company Stockholder's rights policing method", and announced stock right putting divided reform completed basically in 2006. Under such background, it was essential to have carefully examined stock incentive mechanism.This paper was divided into eight parts. Part One was a preface. This part put forward the background and significance of this paper. In Part Two the positive and negative effect of stock incentive was introduced followed by detailed analyze and comparison of several stock incentive plans. In the third part, a few external and internal factors which influence the stock incentive were introduced. When the biggest shareholder occupied 20%~50% shares and board of directors and supervisors worked efficiently, stock incentive mechanism became critical. In Part Four, the factors that influence the implementation of stock incentive of our country listed companies were briefly introduced. Before the divided reform, there were some troubles for implementation of stock incentive mechanism. At the end of 2005,"Listed Company Stockholder's rights policing method"had been issued and some related laws were also the basic laws of stock incentive. Part Five introduced the status of stock incentive in our country listed companies. The effects of stock incentive for listed companies were also analyzed in this part; the financial indexes show that the stock inspiration companies were better than the other companies. To end Part Six, the ways that stock incentive influenced companies were analyzed by choosing two typical companies and analyzing their stock incentive mechanism. Part Seven put forward some constructive suggestions, including the source of shares, scope of stimulation, taxation, etc, Finally, a conclusion was made and a recommendation was given on the study of our country stock incentive mechanism.