The Research Of Performance Based Stock Option Of Executives In Public Companies

This thesis compared the application of stock options in different countries. It also researched accounting codes, tax laws and regulations involved and reviewed practice researches regarding the relation between company performance and stock options. To verify the correlation between company performance and stock options, this thesis focused on the Red Chips, which listed in HK Exchange and operating in mainland. It collected data of 87 companies and 331 executives in terms of compensation and stock options incentives and calculated the correlation coefficients between company performance and stock option incentives, total compensation respectively. The statistics showed there isn't strong relation between the two variables. To further research the applications of stock options in listed companies, the thesis also case studies SARs in Bank of Communications and Stock Options in China Mobile and verifies the correlation between executives compensation and company performance in terms of time. Concerning the results above, the thesis analyzed the possible reasons and made suggestions to the government about the regulation of stock options.