Residual Income Distribution Theory

Mankind had stepped into in 21st century, the knowledge-economy is developed rapidly, market competition become more and more fierce. The factor playing a decision role has already turned from traditional financial capital to human capital. Human had grasped and used knowledge, it already permeate even leading all sides of social life. Modern firm theory argues that enterprise is a complicated contract composed of human capital and financial capital. The imperfection of contract makes the motivation becoming more and more important, and makes the residual claim becoming the most useful instrument of motivation. And more and more financial researchers start to research the distribution of the residual. They think financial not only about the capital but also the capital claim. Synthesize the achievement in research of many document, 1 have already drawn following conclusions: People not only to be paid salary as a labor, but also the claimers of the residual. What is the profound reason of the human capital owners share the distribution of income? Which income should be shared and by what kind form of distribution? This is the mainly matter that this article will be solved.Through the analyzing of the traditional theory about the distribution of the residual control rights and residual claim of the firm, this paper discusses the residual control rights' distribution among the providers of the firm capital. Then, the paper analyses the shortcoming of the traditional share model, and point out what the object (net income) and subject (financial capital owners) should change in the knowledge-economy environment.Based on the forgoing theory, then the paper deals with the main kinds of forms and the corresponding nature, in which the human capital participates in the distribution of the residual returns of the firm. At last introduce the west and other countries examples of the distribution of the income share. Then take our nationals' practice into account, this paper analyses the practice status and obstacles of the ESOPs and ESO in China. Then the paper gives some suggestions and tries to be of help.