The Present Situation And Policy Suggestions Of The Development Of Stock Option Incentive

With the separation of ownership and management， how to reduceprincipal-agent cost and decrease the probability of moral hazard is such an issuewhich modern enterprise always think about. For this, stock incentive is considered tobe a good method to decrease the cost. It grants a right for the executives to buy stockof their own company at a fixed price in future to participate in the allotment of theresidual claimant rights of enterprise, which made the corporate interests be alignedwith their own and drive them to succeed.However, the implementation of the stock option incentive mechanism has itslimits of applicability, not all businesses are suitable for it. Only the medium andsmall businesses which have small scale of capital and tall growing sex flourishinglycan adapt it. Yet, most of the listed companies on GEM of our country come fromhigh-tech industry or having huge potential for growth. Compared with the mainboard market, the listed companies on GEM have advantages over other on theimplementation of the stock option incentive mechanism. Nevertheless, a problemthat can’t be avoided, which lies in the shortness of the laws, low efficiency of capitalmarket, deficiency of company’s manage structure, the lack of professional managers.All of these problems are the barriers to implement the stock option incentivemechanism that needed to be removed.This paper focuses on the elaboration of the basic theory and the GEMcompanies’ present situation of the stock option incentive, and the existingproblems.Besides, Blue Cursor Company’s plan of the executive stock option and itsimplementation situation is introduced as an example to analysis the barriers and itsrenovation of the implementation of the stock option incentive mechanism on thegrowth enterprise board.