Analysis On Current Situation And Implementing Effect Of ESO In Chinese Public Company

Various problems caused by separation of ownership and operation in modern enterprises have been existed for a long time, and both theorists and substantive industry play much attention on how to minimize these problems. In order to impels operators to maximize shareholder’s interests and satisfies their own target simultaneously, ESO(Employee Stock Option) as one of reliable incentive mechanism of stock ownership is widely used to balance the principal-agent relationship. ESO was highly recommended among high-tech companies in Silicon Valley between1970s and1980s. Due to ESO can be seen as venture-capitalize plus with stock option inventive, therefore it had widely recognized among more and more corporations in other developed capitalist countries. Somebody even thought ESO as the second capitalism revolution after birth of corporate system. In China, more and more public companies chose this advanced motivational pattern after year of2006. In this dissertation, the review of the both local and oversea research achievement has been listed. Then the historical process of Chinese enterprise’s stock incentive has been shown, in which, comparison of different ESO patterns before "reform of shareholder structure of public companies", description of related policies and regulations as well as analysis of ESO’current situation after the Reform could be both seen in this part. The research on changes of share prices using the method of event study will be found in the third part, and in this part it will also contain descriptive statistics of ESO implementing situation and empirical research of the implementing effect after ESO. Unfortunately, ESO did not achieve the desired effect. Finally, the reason for the unsatisfactory result will be found in the end of this dissertation, and some advises will be listed as well.