On Trust Management Model Of Employee Stock Ownership

The development of employee stock ownership system has already been quite mature inwestern countries especially in the United States. Although its initial proposal is to narrow the gapbetween rich and poor and to alleviate labor relations, it gradually developed into one of the mostimportant forms for employee stock ownership systems. The trust management model ofemployee stock ownership is one of the vital methods to realize enterprise employee ownership inwestern countries. On the one hand, it can promote its standardization; on the other hand, itensures the realization of the purpose of the enterprise employee stock ownership system. InChina, due to the special background of historical development and limitation of legal tradition,there are many holding patterns of employee ownership system among which employee stockownership meeting is the most common method of employee ownership system. However, theexisting mode of employee stock ownership in China is faced with many legal and realisticobstacles. Although we have made relevant exploration of the trust management model ofemployee ownership, the practice in reality is still fraught with problems. Hence, it is necessary toanalyze the issues of current model along with exploring the principle of the trust so as to figureout the settlement which satisfies the demand of employee stock ownership system. Besides, italso designs the practical mode of trust management of employee stock ownership in China andregulates the development through relevant laws and regulations. The essay can be divided intothree parts: introduction, body and conclusion as for the body it can be further divided into fourchapters. The first chapter focuses on the analysis of the evolution of the phenomenon of China’semployee stock ownership and management mode. From the outset, it defines the concept ofemployee stock ownership system from the legal characteristics. We proposes that the concept canbe defined as: employee stock ownership refers to the enterprise in accordance with legalprocedures, conditionally allowsits worker to hold certain percentage of shares through holdingcompany’s shares in particular mode so as to participate in enterprise decision-making andmanagementand ultimately share the participating and benefit sharing mechanism of corporateprofits. Based on the above-mentioned concept, this chapter explores the practical value ofemployee stock ownerships from the viewpoints of individual workers, enterprise and societyandintroduces the three historical stages of development of employee ownership system in China. Inthe end, it mainly introduces the existing three models of China’s employee stock ownership:employee direct holding pattern, newly established corporate legal entity holding pattern andemployee stock holding committee pattern. Accordingly, it reviews the three holding patterns andthe origins of its legal problems as well as analyzes the existing legal issues which emphasizes ondemonstrating the legal problems and practical obstacles of employee direct holding committeepattern.The second chapter is the combination between the operation of trust mechanism andemployee ownership standardization which plays a vital role in this essay. First, it gives ananalysis of the demands of the operation of employee stock ownership. It proposes that the designof the system should enable to ensure the permanent employee stock ownership as well as thecentralized and specialized equity exercises so as to realize the main purpose of employee stockownership: welfare and incentive. Then based on the exploration of the basic principle of trustsystem along with the demand for the employee ownership system, it leads to the conclusion thattrust management is the feasible way to resolve the employee stock ownership which holds highinstrumental value in the following aspects: the trust concept that conveys the separation betweenownership and beneficial right meets the specialized and centralized requirement of exercising theemployee stock ownership; the independence of trust property and continuity of trust managementcreates the conditions for the long-term operation of employee stock ownership; the trustmechanism provides a powerful guarantee for capital source of the employee stock ownership.The third chapter is the exploration and reflection of China’s current trust management model of employee stock ownership, taking the case of employee stock ownership in Jiannanchun liquor.By referring the typical employee ownership of the trust management model of Jiannanchunemployee, this chapter intends to analyze the case itself and then explore the problems existing inthis process. Based on the above analysis, this chapter carry out specific analysis on the main legalissues of the problems existing in the current company employee ownership of the trustmanagement model--summarize and analyze the negative trust and civil trust that ignores therights and interests of employee which also paves the foundation for the theoretical basis for thetrust model of employee stock ownership in china.The fourth chapter is the construction of the trust management model of employee stockownership in China. This chapter defines the parties of the employee stock ownership trust, digsinto the rights and obligations of the trustor and trustee within the employee stock ownership,figures out the misunderstanding of the recognition as to the object of trust and designs the trustregistration system which is closely related to the object of trust in employee stock ownership. Bythe end of this chapter, it explains the exit mechanism of employee in the trust managementsystem of employee stock ownership, specifies the restrictions on the transfer of employee stockownership and the methods of exiting from the trust management model.