China's Listed Companies In The Implementation Of Stock Option Plans

Contemporary economics has been abandoned the basic assumption of perfect information in the traditional economic theory, taking asymmetric information, which causes a great deal of principal-agent problems, as a general state of the market. As the key to solve the principal-agent problems lies in offering proper incentive mechanism to the economic participators, so the study on incentive system becomes the core field of contemporary economics.Chinese economic system reform is in its pivotal time, all kinds of enterprise, including listed companies, need to set up incentive system according to the present national conditions urgently. For this reason, "executive stock option plan", a kind of incentive system already adopted extensively by the listed company of developed country, is paid attention to by the business circles of our country, and some listed companies have launched relevant practice. Furthermore, academia of our country has done exploratory researches, but the result of study has a lot of disputes.The paper sets out by the concept of executive stock option plane, looking for proofs of the theory and demonstration. It is found that quite a few theories, including the theory of principal-agent, agent cost, human capital, and the demonstration researches of western economists have explained, from different sides, the rationality of enterprises implementing executive stock option plan. Though this system has certain negative effect, it is an efficient kind of incentive system on the whole.As to our country, the executive stock option plan is not only a kind of incentive system, but also a significant system in promoting the economic system reform, improving corporation governance, complementing compensation system, and setting up a long-term mechanism. But in practice, the function of executive stock option plan has been weakened because of the immature conditions of our country and the listed companies. By doing careful research on the executive stock option plans of the listed companies in our country, the author sum up and summarize the problems.In order to promote the implementation of executive stock option plan, the authorstudies the countermeasures of improving the institutional environment against the problems. Last but not least, the paper, according with the practical experience both at home and abroad, gives principles and methods of executive stock option plan at the present stage.