ESOP: Analysis Of Corporate Finance

Presently, academic circles and practical department is placing more and more importance on ESOP which is as one of the cores of corporate finance. The system of the employee stock ownership (or be said Employee Stock Ownership Plans, ESOP) is a new kind of stock ownership system which means that part of the company's shares is held by its employees who entrust employee stock ownership union to conduct as a juridical association to place under trusteeship and manage centrally, by which employee stock ownership union takes part in the board of directors and shares the profit of the enterprise according to stock. As a new form of property, ESOP can perfect stock ownership and governance structure of listed company, expand the public welfare, perfect social security system, improve the enterprise's efficiency and ability of competition, develop our securities market, stabilize social economy. Thus, many countries are focusing on this economical form. Since 80's year last century, the ESOP of west countries was introduced into china, and developed gradually. But the ESOP in China had led to some confusion, because there is absence of high-level law to regulate it and diversifying patterns of the ESOP. This article drawing on the theoretic and practical experiences of foreign countries, analyzes the theory and developing course of ESOP in China, points out the main defects of ESOP which is based on the current situation of our country, and puts forward the suggestions of China's ESOP. The main body of the article includes main body and epilogue. The main body includes five parts. In the first part, the author explains the purpose and meaning of the title, briefly analyzes ESOP's general definition and specific regulations, summarizes domestic and overseas developments, probes into the necessity and probability of China's ESOP.In the second part, the author summarizes four representative theories of the west countries about the ESOP, including Two-Factor Theory, The Share Economy Theory, Human Capital Theory, Firm-Specific Investment Theory. The author also summarizes the explorations of ESOP of our economists in China.In the third part, the author summarizes the characteristic experiences about the ESOP of listed company of the west countries consisting of America, Japan, Singapore, and compares features of system among these countries. At last, the author gains enlightenment to china's ESOP from other countries' practices.In the forth part, the author briefly reviews four stages in the development of China's ESOP. Then, the author summarizes the achievements and the main defects of ESOP in listed companies of China. The author also adopts the case of ESOP of SKD company to explain how to resolve the specific problems of ESOP in practice.In the fifth part, the author puts forward five ways to improve and standardize ESOP of listed company in china.