A Study On Stock-based Incentive Strategies Of Listed Companies In China

Many listed companies in China are under the necessary level of incentives, which will increase the agent cost and reduce employees'efforts. The renewal of Capital Market in China offers a great chance that listed companies can achieve better performance by improving their incentive strategies. It is a practical path to fulfill this goal by using stock-based incentive strategy. However, the stock-based strategy doesn't work effectively without some kind of market environment. It will damage the effect if companies don't base on their own circumstance and establish the same patterns like others'without considering. This paper bases on present market environment in China and tries to draw a clear blueprint of implementing stock-based incentive strategy for listed companies, which can reduce the risks in the progress of reforming.The author uses comparative analysis and empirical research methods to confirm the problems existing in China and analyze the extent how the market problems influence the performance of stock-based strategy. This article draws to the conclusions:⑴The renewal of Capital Market facilitates the implement of stock-based incentive strategy for listed companies, all of which must make use of this chance to improve their circumstance of incentives.⑵T he effect of stock-based incentive strategy is far from significance. In order to advance the strategy, market environment must be improved and perfected.⑶Because of the restriction of market environment, the Top-management incentive strategy should precede the employee's stock-based incentive strategy, and establish the system of stock-based incentive which is different from that of listed companies in America. At the end of this article, the author gives some suggestions to solve the problems of market environment, which are meaningful to the effective implement of stock-based incentive strategies.