The Empirical Research For Influence Factors And Economic Consequence Of Welfare-oriented And Incentive Stock Option

Along with the development of the two powers separate, principal-agent problem arise. Many people began to pay attention to stock options which is a new long-term incentive mechanism. According to the theory of principal-agent, stock option plans will motivate managers to work harder and enhance the performance of the company. But stock options for welfare are common in China which cannot reduce agency cost. In this paper, we selected listed companies which announced equity incentive plan draft from2006to2013.I divide stock option plans into two parts:stock option for welfare and incentive stock option from two different standards. Based on that classification, I investigate which factor affects the two kinds of stock option. In this paper, I find out that poor corporate governance will give rise to welfare stock options. Then I try to figure out which factor affect company when they choose between the performance standards and the incentive period. At last, I investigate the economic consequences of welfare stock option, regular stock option and excessive incentive stock option. I find out that performance of companies which implement welfare stock options is similar to other companies. Companies which implement regular and excessive incentive stock options have better performance than matching companies. But the performance of companies which announce the two kinds of stock options is the same.