Joint-stock Commercial Bank In China Stock Option Incentive Mechanism

In case of modern corporations' separation of ownership and control, the stock options as a long-term incentive mechanism can be able to resolve the separation between the maximization of the surplus claims pursed by enterprise stock holders and the individual interest maximum sought by idiosyncratic human capital owners.The share options incentive mechanism mainly bases on the property rights theories of human capital and principal-agency theories. The share ownership incentive mechanism functions in this way: share ownership incentive -proprietors possess share ownership-proprietors achieve maximum value of enterprise by making great efforts- stock price rises-proprietors obtain share ownership income of the price difference between market price and exercise price.In the late twenty centuries, the stock option incentive mechanism has been widely applied in the bank industries corporation governance in western countries and Hong Kong of China. Till now china bank industries have not applied this stock option incentive method, and its incentive methods are mainly short-term not long-term. Upon the development of share ownership commercial banks in China, the application of stock options incentive mechanism primarily has a realistic foundation, and conforms to development demands of China share ownership commercial banks and objective necessity of economy situations. The implementation of the stock options incentive mechanism in China commercial banks will enhance the competitive power, improve corporation governance , prevent human resources outflow, overcome the enterprise idiosyncratic human capital owners' short-time actions during corporation operations.Based on the theoretical analysis and surveys on the related clauses in the stock options projects, which have applied in the abroad listed companies and commercial banks.At present, few corporations have in a real sense applied the stock options incentive mechanism. China share ownership commercial banks confront a series of institutional problems during the process of these incentive mechanism implementations. As a result, only if those problems have been solved from institutions, the stock option incentive mechanism can be able to apply smoothly in China share ownership commercial banks.