Stock Option Incentive System In The Implementation Of China's Effect

Along with the establishment of modern corporate system and the development of capital market rapidly, the principal-agent problem is becoming serious. Stock Option causes shareholders and executives to form the benefit community and can effectively resolve the principal-agent problem as a long-term incentive. Many countries in Europe and the United States have established the system of Stock Option since the 1980s, and China has actively exploring its specific system of Stock Option. In 2006, China has successively promulgated a number of laws and regulations about the Stock Option, which promote the development of Stock Option in China greatly. However, the effects of Stock Option have been disputed.Firstly, game models are given to analyze the effectiveness of Stock Option on motivating executives to work hard, improving executives' superficial psychology and attracting talent based on the theories of Stock Option. In theory, Stock Option, which takes account of the benefits of both shareholders and executives, is an effective incentive system.Secondly, the development and application of Stock Option are analyzed in detail with 2006 as the threshold. The thesis also analyzes the features and causes of some typical patterns of Stock Option to provide guidance for further development of Stock Option. The 18 listed companies' specific plans, which are implemented in 2006, are analyzed by statistical method to provide reference for enterprises.Finally, Yili's Stock Option plan is analyzed as a case. This thesis researches the effects of Stock Option in China, and expounds the problems and causes in practice, and puts forward some recommendations. There are many factors which influence the effects of Stock Option in practice. Enterprises should establish reasonable Stock Option program according to the special conditions, and it can encourage executives to enhance the long-term value of enterprises.