Research Of Incentive Mechanism Of Executive Stock Option Based On Relative EVA

Financial crisis in2008has fully exposed executive stock option a number of problems, forcing enterprises to look the impact of executive stock option by the financial crisis at different angles, to re-examine and evaluate the effectiveness of the existing executive stock option and design a new executive stock option program. At present, because the traditional executive stock option has fixed defects in the exercise price and performance evaluation, so that the company’s operators have the opportunity to manipulate the company’s share price to reap personal profits, swallowing up the wealth of the shareholders of the company, which is contrary to the company’s overall value maximization goal.In response to the shortcomings, this paper introduces a performance evaluation index EVA and relative performance evaluation methods. It will link performance incentive compensation to the contributions of the managers and changes in sectors, and reject the impact of performance incentive compensation by the noise on the stock market. On this basis, the paper designs the incentive mechanism of executive stock option based on relative EVA. It solves issues of the traditional executive stock option to a certain extent, and discusses further implementation of executive stock option in China.In the first, this paper introduces the topic, background, significances, research ideas of the article, as well as the main research results of executive stock option at home and abroad. Then this paper provides an overview of executive stock option and EVA, and introduces the status quo of the executive stock option in our country. On this basis, this paper analyzes problems of the executive stock option of listed companies in China. In order to solve these problems, the paper designs the incentive mechanism of executive stock option based on relative EVA. Finally, this paper uses incentive mechanism of executive stock option based on relative EVA to conduct a sample calculation and comparative analysis of the same model, to verify the reasonableness and effectiveness of executive stock option based on relative EVA.