Research On The Relationship Between The Human Capital Value And Executive Stock Option

Human Capital(HC) is in an important position in the era of knowledgeeconomy and becoming the key factor in the development of enterprises. Withthe rising of Human Capital status, it is necessary for a reasonable measurementof the Human Capital Value(HCV) and its effective incentive. Executive StockOption(ESO) as a new type of incentives, plays an important part in humancapital value enhancement. ESO is essentially sure about the human capitalproperty and advocates managers sharing the enterprises’ surplus value. Itresolve the contradictions of economic interests and private benefits of controlbetween managers and shareholders. So that they keep the same long-term target,to avoid the managers’ short-term behavior and moral hazard problem. In thisthesis, from researching the relationship between the HCV and ESO, the aim isto seek effective human capital incentives, which not only reflect the HCVreasonably, but also to improve the work enthusiasm of HC, in order to enhanceenterprises’ performance.First this thesis reviewed the relevant research literature on HCV and ESO;then introduces the relevant theories. After describing the situation,characteristics and problems of ESO, it studies the relationship between them,from three dimensions of ESO, including incentive price, quantity and thecombined effect, choosing A shares of Shanghai and Shenzhen markets as theresearch objects, through the way of Empirical Analysis.This thesis based on studying finds that besides the quantity withoutsignificant relationship, the other two are positively related to the HCV. Itmeans that the HCV and ESO of China can be reflected by market in a way. Thequantity incentive of China is weaker, Companed to the quantity of Americanand other debeloped countries. The nature of China’s enterprises and Earings PerShare(EPS) are with little affect to the human capital value. In a word, the addedof HCV is not fit for development of business performance. The human capitalincentive mechanisim is inadequate. After analyzing, some rationalization proposals are summaried in this thesis.On one hand, establishing a rational incentive mechanism of HC is necessary byanalyzing the impact of factors. On the other hand, from the standpoint ofaccounting, resoving the accounting treatment about ESO and HCV should bedone. What’s more, it emphasis the importance of the improvement on externalenvironment.