Study On Adaptability Of Stock Option Incentive Of Listed Companies

Incentive mechanism as an important element of corporate governance hasalways been a concern. And Stock option as an important means of incentives alsoattracted people’s attention. Since the1980s, stock options began to be popular in America’scorporate, and in the1990s, stock options, more like a charm that greatly stimulated the economicprosperity of the United States. so stock options get rapid development in the world, andcontributed to the high-tech companies huge success such as Silicon Valley, at thesame time also bring a high income to the Company’s senior management (mainincentive object), created a large number of millionaire even billionaire, so have beenwelcomed by the various stakeholders. However, on the other hand, the Americaneconomy in2002later suffering setbacks, the Chinese companies set at the defeatoption plan, such as Milord Real Estate Development Group、Shenzhen WorldunionProperties Consultancy and so on. These examples had to draw attention of doubtsand criticisms to stock options incentive mechanism. The proceeds that bundledpersonal income, stock prices, company performance together is easy to causeexecutives to carry on the earnings management to manipulate stock price, in order toobtain a higher reward in the future years, and trigger a new round of risk. Inparticular, in our imperfect capital market, such situation is more possibility, at thismoment; the incentive effects of stock options not only cannot be achieved, but alsoaffect Company’s sustainable development.Stock options advantage to its powerful stimulation effect and low cost hasbecome the first choice of incentive methods in most listed companies, occupies anincreasingly important position in the Company’s remuneration structure. In view ofthis, this article has carried on the analysis to stock option’s influencing factor, hasdiscussed the compatibility of stock option, hope to provide related proposals to thestock option in our country’s smooth implementation. This article take theprincipal-agent theory, the enterprise life cycle theory, the economies of scale theory,the risk reference theory as foundations, used the statistical method to introduce thestock option plan in our country’s implementation characteristic and in the differentindustries, different scale, different company’s risk distributed situation. Then, basedon the current situation of executive stock option in China, by using the descriptive statistical analysis and regression analysis method, has analyzed the company growthpotential, the company size, the company risk to influence the stock optionimplementation effect, thus summarizes stock option’s adaptation situation and putsforward the related proposal.This paper used the method of normative research combined with empiricalresearch, according to the latest data, from the aspects of corporate growth, corporatescale and corporate risk to analysis the stock option compatibility, and has drawnfollowing conclusion: First, growth of the company and the stock optionimplementation effect is being connected; Second, company scale and stock optionimplementation effect Non-correlated; Third, company risk and stock optionimplementation effect inverse correlation.