Study On Management Opportunistic Behavior In Stock Option Incentive Of Listed Companies

From 1950s to now,stock option incentive has become the most widely used modern enterprise system of a long-term incentive mechanism.On the one hand,more and more listed companies in China begin to implement stock option incentive to encourage management to work harder,and the income form stock option incentive has become a more important part of management compensation.On the other hand,most scholars have found that stock option incentive plan is difficult to play its due incentive effect.Design and implementation of stock option incentive in some listed companies have some problems,just like lack of supervision,unjustified performance index,earnings management and so on.These problems reflect strong opportunism tendency of management and the severe opportunistic behavior taken by management.Firstly,based on the existing research,theory and regulation,this paper analyzes the goal,objective and method of opportunistic behavior of stock option incentive.Then,this paper analyzes the preference of managers' opportunism behavior in different stock option incentive stage,and tries to form a systematic logic of opportunistic behavior of the stock option incentive.Secondly,this paper selects the Dr.Peng Group as a case,and analyzes the management opportunistic behavior in stock option incentive.This paper finds that the opportunistic behaviors carried out by Dr.Peng Group's management include following methods.Management has chosen to publish stock option incentive plans when the stock price is relatively low to take the subject of incentives with a lower price.The management chooses to impletion the stock option incentive plan after the major restructuring,so as to have a "free ride" to complete the performance index.Management impletion the earnings management to reduce the difficulty of stock option incentive plan.The management revised the draft of stock option incentive plan to create conditions for earnings management.Then this paper further analyzes the causes of serious opportunistic behavior in stock option incentive.This paper concludes that there is opportunistic behavior in the management of China's listed companies,including opportunistic timing,earnings management,design of plan and change the dividends.Opportunistic timing and earnings management are common opportunistic behaviors.Management can simply achieve the performance index before the foreseeable financial results are greatly improved and earnings management can also help management to reach the performance index and improve financial performance.This paper also find that,management will take different opportunistic behaviors because of different performance levels and stock price levels in different stock option incentive stages.With insufficient supervision,the management opportunistic behavior of stock option incentive will weaken the incentive effect and raise the cost of principal-agent and harm the interests of shareholders.This paper also puts forward some suggestions on the point of design of equity incentive,the internal governance of the company and the external governance of the company.