Study On The Effects And Sustainablemechanism Of Incentive Stockoptionsof CEP

Incentive theory is a positive science formed after long term practice. With therapid development of scientific technologies, the investors and operators have beengradually separated in company operation and the level of professional manager hasbeen growing. The incentive mechanism in company has been constantly completed andperfected based on the theory of principle-agent. Human capital theory admits thecapital attribute of company core employees and scientifically prices them, whichenhances the popularization of stock ownership incentive in American high technologycompanies and drives the American economy and science to boom during the past30years.Such effect has made stock ownership incentive preferable in a global scale. Theprevious article of this paper has focused on introducing some stock ownershipincentive theories and the domestic and international application of them.The company of CEP is a corporate company held by the state. It has been20yearssince the founding of the company in1993. Due to unified stock ownership during theearly stage of the company, it bore losses for consecutive years due to lack of dynamism.In1996, it reorganized itself and introduced stock ownership for mainly manageriallevel employees, successfully reversing the losses. Since2005, CEP has further carriedout two stock ownership incentive plans for the core employees in the company, whichgreatly improved the technologies, market and assets of the company and madesignificant contribution for the fast growth of CEP. Meanwhile, due to the enormousbenefit for the employees brought by previous stock ownership incentive plans, theemployees of CEP are more and more demanding in terms of stock ownership, puttinghigh pressure on the company to continue motivating them.By analyzing the significant achievement made by the past stock ownershipincentive projects in CEP and summarizing the defects of the stock ownership incentiveplan, this paper proposes the necessity of continuous stock ownership incentives forCEP from related perspectives; by analyzing the cases related to company stockownership incentive and combining with the current related rules in the state-ownedstock management, this paper also states the non-applicable conditions for CEP stock ownership incentive.Lastly, according to the internal and external environment and development ofCEP, combined with the status of incentive resources of the company, this paperproposes the incentive measure of restrictive stock ownership and dividends. Inmid-long term, this paper advises CEP to step into capital market and apply long termstock ownership incentive plan in the environment of public stock price. Besides, thecompany should establish company incentive culture in order to achieve the target ofcorporate organic growth.