Explore The Development Of The Stock Option System In China

Incentive mechanism and commitment mechanism are two most important and fundamental aspects in business operational mechanis. A lot of lectures and documents have stated that it is necessary to found effective incentive mechanism and commitment mechanism today. The paper focus on many areas about stock option,including how the stock option comes into being,the development and ajjplication of the stock option in western countries,the feasibility and problems when it comes to China,etc. The main purpose of the paper is to find the way of establishing the Incentive mechanism and commitment mechanism that adapt to the situation of our country.The paper consists of three parties. First,the paper have a general introduction pfl stock options in western countries. Executive stock options (ESO) is a kind of compensation system,which gives managers the right to buy the corporation's stocks with pre-determined price and amount,then the holders can sell the stocks to gain the price difference. According to the practice in western countries,the ESO can well eliminate interest conflict between managers and shareholders by associating manager's compensation with company's long-term performance. Due to developed ESO system in the United states,the paper deal with it as an example,including it's origin,type,quantity,and development,etc. Then,the paper discuss the existing problems in the course of applying ESO in China today. Having consider special property right characteristic and legal system In our country,the paper specify these problems as following:where the stocks in ESO come from;problems resulted from stock market;conflicts between stock options and shareholder's equity;efficiency and morality risk etc. Based on these analysis,the paper state some good thoughts on how to develop stock options in China,such as how to correctly understand stock options' significance;how to use stock options in different companies and industries;how to reform related policies,regulations and system;how to improve manager's accomplishment,market's transparency,etc. Final,basedon some facts in current listed companies,the paper answer how to apply stock options to motivate managers in our country today . It involves the history of ESO in China,the features of current ESO model,and ESO's main contents in the future.After the above three part,the paper points out that the effects of the ESO vary from different types of companies and industries. In order to find the enterpriser incentive mechanism with our own characteristic,we must develop many kinds of incentive measures on the basis of ESO. At the same time,we must constantly endeavor to improve the market environment by cultivating rational securities tiarket,reformulating and revising current regulations,building scientific and Standardized human resource market,etc. During the practice of our economic inovation,the foundation and development of the incentive mechanism and commitment mechanism will be bound to have strategic significance.