Effectiveness And Enhance The Way Of The Equity Incentives Of Listed Companies

With the development of the organization style of enterprises and the separation between the ownership and the rights of control in modern enterprises, the function of entrepreneurs in the classic sense were separated and then there occurred professional entrepreneurs. The interest and goal between them, however, are not coincided with each other, which will cause losses on both efficiency and economy. To minimize the losses, we need to build effective mechanisms on entrepreneurs.Between the owner and the entrepreneur, in the essence, is the relationship of principal-agent ESO is just the long incentive mechanism on entrepreneurs to strengthen common interests between them. The ESO will not only give the operator lots of currency rewards but also make interests of operators and enterprises closely, which will bring out effective incentive.In the first part of this article we simply introduce the background of theory and practice about this issue, the study done by others before and the thought of studying in this article.In chapter 2, we will firstly describe the basic factor and characters of ESO, on base of it we will do some analysis on scale and give out the conditions applicable. Then we'll illustrate the theory, the mechanism, the effect and the judgment method of the effect.In chapter 3, firstly we will discuss the implement situation and the problems of ESO in the listed companies, and then analysis environment of information, environment of external constrain, and environment of internal constrain.In chapter 4, we firstly give out the model and assumptions of the judgment about validity of ESO in our listed firms. On base of it. we will study the influence on validity of ESO of three aspects of power such as the validity of information transmitting of capital market, the external constrain and the internal constrain.In chapter 5, we'll study how to promote the validity of ESO from such efforts as improving the information transmitting of our capital market, strengthening external market constrain, perfecting rules of internal incentive-constrain. Finally, we'll study the designing of ESO on implement scale, source of stock, condition of executive.