Empirical Study On The Effect Of Stock Option Incentive Of The Listed Companies

The initial purpose of stockholder’s rights inspiring is to solve the "principal-agent problem" caused by the separation of ownership and management in the modern enterprise system. It was first advanced by the listed companies in the United States in the fifties of the last century. Due to the peculiar conditions of our country, it was not until the state-owned enterprise reform completed in the end of last century that the modern enterprise system based on the system of property rights formally was implemented in our country.In2006, listed companies in China basically have completed the reform of non-tradable shares, solved the typical problem of the coexistence of different type of shares in China. After that, Chinese security market enter into a new stage. In the same time, as a long-term incentive measure for executives, stockholder’s rights inspiring is being widely used in listed companies.Many domestic and foreign experts have done qualitative or quantitative research on the effect of stockholder’s rights inspiring. As for the research scope, studies mainly focus on the effects on company performance and stock prices. Part of the experts think that stockholder’s rights inspiring will have positive influence on company performance, while others have different views. However, experts all consider stockholder’s rights inspiring is beneficial to shareholders.So far, although experts have done a lot of researches on stockholder’s rights inspiring, most of them only focus on one side of the effect, few of them do empirical test on both sides. So, this article will do empirical test on the effect of stock option incentive which includes impact on both performance and share price of the listed companies. Then according to the results of the test, elaborate the reasons which hinder the listed companies in the pace of implementation of stock option incentive.There are about seven patterns of stockholder’s rights inspiring, the most widely used one is stock option incentive. So, on the basis of reading the results of previous studies, this article only focuses on one pattern.Ultimately this article draws conclusions as follows:First, the use of stock option has positive effect on the performance of listed companies.Second, the rise of stock prices can be caused by the use of stock option.Finally, why not all the listed companies choose this measure to motivate executives?...