Non-listed Company's Stock Option Plan

Stock option is not only an incentive system, but also a corporate governance system. It is a Pioneering work done by the theory and practical in the combination with the principle of equity incentive and the mechanism of capital market. The fact that stock option has been used by most of the world's top 500 enterprises evidences that this system can better solve the company's "commission - agents" problem.However, stock option seems "natural" related to listed companies, and less people pay enough attention to the non-listed companies' stock option plans. Although non-listed companies' stock option plans are unique in technical operations because of its shareholding structure, governance system and the different characteristics of the stock, the principles of stock option are generally applicable. Non-listed company is this article's research object. This article is trying to elaborate the use of stock option plan in non-listed company from both theory and practice, through relatively strict logical process.Stock option is one form of Equity Incentive. The article derives the theory basis of equity incentive by quoting ideas from New Institutional Economics theory. This paper is summing up the different ideas on the effect of equity incentive from domestic and foreign scholars, and making a conclusion that there are feasibility and necessity for Chinese non-listed companies to use equity incentive.Based on "whether or not it has options nature" and" The role of equity", this article shares the main form of equity incentive to classify.From the comparison with non-listed companies and listed companies, this paper analyses the focus and difficult on the design of stock options for non-listed companies. And, the views that how non-listed companies to design stock option are put forward in this paper.