Our Country Listed Company Stock Option Incentive Mechanism Legal Issues Research

Stock option is first introduced in1950s in USA, then spread to Europe innineteen seventies and gradually developed in Asian area since1990s, which iswidely used as a Long-term salary incentive system to incentive managers andemployees in corporation management. Along with the widespread use of stock optionin public companies, various countries make relatively sound and realistic laws andregulations to make specific operation of stock option standard, the laws andregulations will be adjusted in practice in order to promote the improvement of thesystem of the company and the steady growth of economy. Numerous laws andregulations in securities market give a big push to the application of stock option, thedevelopment and perfecting of legislation plays a key role in the growth andinnovation of the system. So this means the special laws along with stock optionstimulate the innovation of the system, and help America and other western countriesstand out in economic competition. Stock option has been proved by several decades’theory and practical experience in alien countries to be the most effective tool to solvethe agent problem in modern enterprises, it has been widely adopted in USA,Japanese, Germany and other countries and has required favorable effect.The enterprises of our nation began to explore stock incentive systeminitiatively, however the exploration was proved to be invalid for lack of the certainmarket conditions and economic environment. With the reform of the shareholderstructure of listed companies, the listed companies of our nation tried to adopt stockoption. New 《Company Law》、New《Securities Law》 and 《The MeasuresGoverning Equity Incentive Plans of Listed Companies (For Trial Implementation)》published by CSRC remove certain barriers in the road of implementing the systemand make the adoption of stock option standard. As a result more firms commence totake the system. Anyway, some legal impediments still exists that make the adoptionof stock option in an awkward situation. My article serves as a modest spur to inducesomeone to come forward with his valuable contributions.In my essay I’ll analysis the theoretical Connotation、legal relation、value and risk of stock option, research thelegal impediments based on the practice in our country, and raise some suggestions onstock option’s perfection On the basis of foreign advanced legislative experience. Iexpect my essay will catch the general concern of legal Theoretical and practicalcircles to stock option, so that to make the system booming in our nation.