Comparative Theory Of Stock Options And System Design

Executive stock options are the most popular form of long-termcompensation incentives for executives in foreign companies. It can makeowner's goals in accordance with operator's, decrease agency cost andovercome short-term action and make them pay more attention to enterprise'slong-term development. This article gives a general analysis and research forthe applicability of stock option incentive system. Through analyzing theapplicability value of stock option system, contrast it's applicability anddevelopment at home with at abroad, the article points out marketenvironment and applicability obstacle which Chinese enterprises are facingwith. Then the article discusses the applicability prerequisite of stock optionsystem in China. Based on integrating theory with practice, the articleexplores how to perfect long-term incentive system to executive in China andhow to introduce stock option system into China. In the end, the articleprovides policy and standard operation suggestions which conform to thesituation in our country.The article first introduces the concept and characteristics of stock optionincentive system and it's theoretical basis, analyses it's momentous currentsignificance in China. Then taking USA as an example, it introducesinternational experience in carrying out stock option system, and probes intosuccessful conditions based on the Western developed countries, and analysesmajor obstacles to carrying out stock option system in China, provides it'sapplicability and adaptation according to cases. In the end, it forecasts broadprospects of stock option system in China, and provides policy suggestion tospread it step by step.