Reasons Of China Insurance Company ESOP Being Stopped And It's Future Trend

The insurance company employee stock ownership plan is a sort of emerging equity distribution system. In this age of enterprise reform, it is of great historical significance. The system embodies fully that staff is in the internal core position of enterprises, which has overthrew people's minds about "working for others" totally, making staff realize their dream of working for own desires. Meanwhile, all the ownerships, profits and risks of the enterprise are distributed to employees leading to the integration between firm and staff. Therefore, the implementation of employee system is an incentive mechanism which can be called, welfare policy, or a kind of measure for avoiding enterprises risks. For employees holding the equity or stock of the company indicates that they can handle their prospects. Staff will realize that working carefully and actively can bring much more benefits to them. On the contrary, their own profits will shrink at a discount probably. In this situation, everyone will engage in enterprise group, becoming the indispensable and crucial part of enterprise operations. Staff's responsibilities, motivations, and subjective initiatives for working will be stimulated adequately. Simultaneously, the values and sense of honor which are sharing the weal and woe together arise spontaneously. In a general way, employee shareholding conference is established within the enterprises representing the most common people's fundamental interests. Individual employee cannot discuss and vote with corporation directors together, so the organization manage and operator equity which the enterprise'employees subscribe to and negotiates the problems such as profits distribution with association of corporation directors by representing some employees who hold shares of the enterprise.Since the employee shareholding system was launched in 1950s, employee shareholding has been favorably received by enterprises from entire world. As the development and reform of our country's enterprises, employee shareholding system gains more and more attention and is utilized extensively in China. However, to some extent, the implementation and development are restricted by numerous factors. The disadvantages including the working operation standard system not being put into practice exactly and the low level of staff overall quality still lie in the development and operation of enterprise, turning into the stumbling block which hinders the current development of the insurance company employee shareholding system.First, the dissertation introduced the basic theory of employee shareholding system such as the origin and concept, and depicted the international and domestic development situation briefly. After that, the essay analyzed the significance and practical situation of implementing the insurance company employee shareholding plan at the present stage of China combining with the characteristics of financial enterprises in the field of insurance. In succession, the article demonstrated the reasons that employee shareholding was called to stop from the aspects of equity distribution, the shares capital origin and laws and regulations respectively. At the last part of the paper, the author made predictions about insurance company employee shareholding system in terms of development tendency and proposed some pieces of constructive policy advice according to the rectification measures the aspects related to regime, tax revenue, audit, and supervision and legislation.