Research On The Relationship Between Corporate Performance And Stock Option Incentive System

Under the condition of market economy, great advances have been made in socialdevelopment. Among those time, enterprises played an irreplaceable role. Goodoperation of enterprise has been the guarantee of accumulating social wealth. Amongthe three resources which supporting the sustainable development of enterprise,financial resources and material resources can greatly improve the quantity ofenterprise profit, but human resources will take great improvement in quality for theenterprise. So, enterprises have paid more and more attention to talent problem at themodern time, especially in the enterprise top management. How can enterprise do toattract and retain the excellent managements? After long research, the scholars foundthat incentive is an effective method. Although, to a certain extent, the traditionalsalary incentive can improve the enthusiasm of the managers, With the improvementof our living standards，just because focusing on immediate interests too much, so ithas been unable to meet the needs of management personnel. Then, the stock optionincentive which is called “Golden handcuffs” has appeared.In this kind of enterprises, ownership and control power separated from each other,principal-agent relationship exist between shareholders and top managements, andalso, agency fee produced while asymmetric information in the economicenvironment. The shareholders pursuit the maximize interests of the enterprises, whiletop managers seeking the maximum personal benefit. The two different goals willinevitably lead to a result that one pursuit it’s own interests at the expense of otherones’. Therefore, It’s vital to incent managements in a reasonable way to make theirgoals same with shareholders’. And also, It’s the right problem which shareholders aretrying to solve. The stock option incentive incents managers with its long-termpotential interest, make them focus on the long-term interests of enterprise. Then make their goals to reach consensus with the owners. Followed after the foreignenterprises, China’s enterprises adopted stock option incentive, and obtained certainachievements. But also, a lot of problems appeared. Even some enterprises cancelledthis incentive system after use it.Based on the incentive theory, this paper firstly puts forward the insufficient of thetraditional salary incentive, then draws forth the stock option incentive, explains it’stheory and implementation status in details. Secondly, According to the change trendin enterprise performance of ZOJE joint stock company, and based on the study inboth stock option incentive and enterprise performance to analyses the relationshipbetween them. Finally, analyses the enterprises’ insufficient in the process of applyingthe stock option incentive system, and put forward reasonable optimization measuresfrom the perspective of enterprise oneself, policy environment and marketenvironment.