Employee Stock Ownership Plan Study

A series of problems have been derived from the Employee Stock Ownership Plan in our country, for which responsible department has stopped examining and issuing internal employee stock. However, the practice of internal employee stock is still continuing in many places. The national department concerned demanded urgently on Aug 6th 2003 to suspend the employee stock ownership in Electrical Corporation. Thus, the ESOP attracts people's attention again. It is undoubtedly significant to inquire into the necessity and possibility of developing the ESOP, analyze the existing problems and their causes and then put forward some legislative proposals to establish the developing orientation and method of ESOP in our country.This paper discusses the ESOP consists of four chapters except the foreword and conclusion. Chapter I: the ESOP is introduced from the aspects of definition, feature, historical development, function as well as limitation. A general picture of it is sketched. Chapter II: the necessity and possibility of carrying out ESOP in our country is analyzed from the aspects as motivating employee's zeal, realizing justice and efficiency, strengthening economical and political democracy, perfecting corporation governance structure and theoretical basis as well as basis of system. Chapter III: some problems in the practice of ESOP in our country areanalyzed in order to make clear the developing direction of this system. This chapter indicates that it is because of lacking regulation or improper regulating rather than some other reasons such as ideology, theory and system circumstance that the problems arise. Chapter IV: on the basis of sorting out the general ideas, some legislative proposals of perfecting ESOP are put forward from the four aspects as scope of application, source of stock, administration of stock, exercising of stockholder's rights in order to completely construct the legal system of ESOP.