Study Of The Stock Option System

Stock option , an institution which has both incentive and risk , always arose argument in theory and practice . On the basis of analyzing its general theory , this article probes basic theory of stock option systematically . It focuses on the practice and problem-solution of stock option in China . And on the basis of research national condition of China , it put forward several suggestions to solve the problem of Chinese stock option . If in the spreading of stock option system , this alien institution could be transplanted in a creative way , then we can say that this transplant is successful.The general theory of stock option includes its concept legal characteristic, theoretical basis and value . Stock option is a kind of right endowed with managers to buy a sum of stock in an arranged period at a fixed price . Its legal characteristics are : limited, alternative, incentive, circulating of share and policy-making by shareholders . It is based on theory of agency by agreement, labor capital theory and incentive-benefit theory . The article analyzes its value on both manager and company and draws a conclusion that it's an institution to solve the problem of agency controversy through incentive by future income and controlling short-eyed act by longer-development.There are three basic legal questions of stock option : the question of where the share come from , how to endow the stock option and how to exercise the right. This article takes successful method of developed countries as reference . It also try to analyzes the legal issues in one economic system and explores them connectedly . First, on the question of where the share come from . Before a company performing stock option , it must store a number of stocks . The popular methods in other countries are: storing some shares before issuing , issuing new shares and buying back its own shares . Second , on stock option endowing , it is mainly about endowing and controlling body, time and number of endowing . Finally , the author also analyzes the key elements of price method, waiting period etc.The main points of this article are practice observation and question analyzing of stock option in China . The exercising of stock option is very important to Chinese company . Because it is a win-win strategy . Through analyzing its present situation and comparing the Chinese practice with international common method , we can find that the stock option system in China is not a real one . This incentive institution of Chinese characteristic come into being under the limit of China's present legal system . The spirit of the institution is not incentive which stock option system should has . Presently there are two main legal obstruct which hamper the practice of stock option in China : One is the conflict which present law on share source, benefit distribution ; the other is the legal vacuum . There are not any clause in Chinese law to regulate stock option . Because of the tight connection between stock option and capital market , the article further analyzes the incentive effect of stock option on the condition of low efficient capital market . It holds that it's necessary to do the concrete research .The aim of this text is to solve the legal problem of stock option in China . So , based on the theory of stock option , taking the successful practice of foreign countries',combining the current performance of stock option , the article put forward the solution . It'smainly about ①Because of the disadvantage of the foreign countries' popular exercise like issuing new shares ,the company capital system should be reformed . Compromise authorized capital system should be set up to guarantee a stable source of stock option . ②Improving company governance structure , making clear the body of endowing and be endowed .Shareholders meeting is the supreme organ to make resolution . Stock option is a way for managers to participate distribution . The plan should be decided by shareholders meeting . Who should be endowed with stock option depend on the company's characteristic of governance and idea . The relevant regulation should be autonomy clause in company law . Considering the trend of more participate in company governance , the range of subject receiving stock should also be expanded . ③ Putting forward a series of fundamental legal suggestion on stock option to promoteits performance to a sound situation . ④ Holding that we should stick to apositive and stable strategy . And the construction of it should be step by step . In this stage the strategy should be "explore positively , concentrate on test , steadily expand it". Under present condition that is not suitable for overall expanding this system , what is right is to try out first and then popularize . Here is also where this article's major original thought.There are two suggestions in the conclusion . One is to evaluate the stock option system correctly . The other is sincerely hoping that this matter seize more eyes and more people do research and practice of it for its' final construction in China.