Incentives Of Executive Stock Options And Pricing Model Study

Since 1990s, Executive stock option system becomes an indispensable important system under the modern company frame works in order to solve agency and morals risk problems. And, the system itself, becoming better and approaching perfection gradually with the completion of laws and regulations on the relevant financial capital assets. We can say how to understand Executive stock option system fully, and how to merger this system with the company manages structure effectively, Become a rather urgent and important task. Incentive mechanism designation is a key problem of modern enterprise theory. In the western countries, especially in the U.S, CEO system and stock option systems, which have the characteristic of taking encouraging for a long time, considered to be the cause of modern company successful development. Because the listed company of our country lacks the long-term incentive mechanism, the agency problem is a highlight question. In order to retrain executives and encourage them strive for long-term interests of the company. It is inevitable to introduce the system of stock option. However, no matter in theory or in practice, we all lack essential preparation and design.These years, the manager's allotment of shares right is considered as the inducement of U.S. company falsifying the company achievement and redounding the stock price, the emergence of a series companies scandal can not be explained to be the specific phenomenon of some manager's violation operation, But the systematic defect which exist in the company system, say fundamentally, American company has not found the incentive system in conformity with new economic development yet. We should regard this as the new opportunity; continue probing into the long-term encouragement system that suitable for Chinese listed company.The first part of this text recommends and explain the intension of the system of executive stock option with its key element, characteristic, current development, positive and negative effects, etc. which offering basic support for followinganalysis; The second part, described the behavior of stock price and Black-Scholes option pricing model from the angle of quantitative analysis, and discuss the value factor of stock option with its encouragement, analyzed the change of every factor in Black-Scholes option pricing model impact on option worth; then analyzed the leverage effects and manager's morals risk model of Executive stock option, At last, considering the main defect existing in the system of Executive stock option at present, that is: It depends on stock market unduly ,and the stock option incomes of manager has no relationship with manager's achievement. This text bring forward the manager synthesizes achievement and appraises model. The third part, explain executive stock option encouragement with connection to commission - agency theory from the angles of economics. The end of this text is put forward the policy and suggestion to the question that exists in the stock option market of our country.The characteristic of this text is that the way to combine qualitative analysis with quantitative analysis probes into the encouragement question about Executive stock option. The innovation of this text is bring forward the manager synthesizes achievement and appraises model, Basis on this model, the manager's income from stock option depend on the increase of company value rather than the market factor. It is undoubtedly more rational than the traditional means of payment that only considers stock market price. It makes the interests of the manager and company owner reach unanimity, thus get better encouragement effect.