Study Of Executive Stock Options

A sound structure of Corporate Governance consists of restraint mechanism and motivation mechanism. However, as to the enterprises in China, especially in the state-owned enterprises, the imperfection of motivation mechanism has been existing for a long time. Although some reforms have been taken, which motivated the initiative of the managers, they lead to the short-term conducts. Meanwhile, stock option born in America provided a new way to tackle this problem. Although stock option emerged in China three or four years ago, the real mechanism still were not implemented for the sake of China's realistic conditions. What we called 'stock option'in China with merits and demerits as well were indeed transformed from the west, and paved the way for the implementation of the real one. The dissertation intends to discuss this system on the basis of the existing achievements and the practice in China.The dissertation is divided into four parts:The first part is the general narration of stock option, which is started with the definition, characters and the general implementation processes. Secondly, the classification of stock option is introduced. At last, some other incentive methods by stock are presented.The second part is about the theoretical foundations and the necessity of stock option. The former is mainly about option theory, principal-agent theory and human capital theory. Then I discuss the necessity of implementing stock option in the perspective of perfecting the Corporate Governance.The third part is about the possibility of combining the Manager stock option with growth enterprise market under China's present circumstances. Firstly, the present situation of stock option followed by its characteristics is introduced. Thenit comes to the existing barriers of executing the real stock option. At last, for the purpose of implementing the real stock option, I research on the likelihood of incorporating it with our newly-established growth enterprise market, making a conclusion that it can be done in this stock market for the time being in China.The last part is the cool consideration on stock option, which is mainly about the negative influents and the possible moral risks it will bring.