Research On The Incentive Of Executive Stock Option Of Listed Company

Executive Stock Option (ESO) is a kind of Long-term incentive system that companies have been using to encourage executives to work hard for the purpose of developing the company with the separation of ownership and control. Since the 1990s, ESO has been prevailing in America and has been playing a due encouragement role in the practices. As for our country, along with the setting up of modern enterprise system and rapid development of the stock market, principal agent problem becomes worse. In order to solve the problem, some companies in our country have already adopted ESO.The application of ESO is restrained by a series of systems in the company in china, and it is still irregular and does not gain the incentive effect. Based on such a background, it is really necessary, we think, to reexamine the environment and the analysis of effect of ESO in implementation, and make a prospective study of it for the purpose of standardization.This paper is guided by theories of management, statistics, accounting and other disciplines theories, and takes the existing model, problems and countermeasures of executive stock option of listed companies in our country as the main line. It learns the forefront of research results of executive stock option at home and abroad and analyzes the environment and effect of ESO in implementation using in the Research of the combination methods of normative analysis and empirical analysis. This paper first expounds the corporate governance theory, entrepreneurs and human capital theory and motivation theory, which is the basis of ESO in detail, and analyses incentive effects of ESO. Then, the paper elaborates on the course of development of ESO in the United States, contrasts it with the typical pattern implementation in China, pointes out the similarities and differences between them and analyzes the theoretical obstacles of ESO implementation in China. Follow it, the paper analyses to find that China's stock market is gradually improving, but is still in the weak-effective market conditions by the means of correlation analysis with the Shanghai stock market the A-share listed company data samples. And then, it analyses that the effect of the implementation of ESO in China is not significant through Empirical Analysis by the means of matching test and regression analysis. The major reason for it is that the number of the stocks holded by the executives is too small and ESO does not play an incentive role. Finally, according to the obstacles and problems in the implementation of China's listed companies, the paper gives the corresponding recommendations.