Research On Impacts Of Share Incentive On Listed Company

The separation of ownership rights from control rights brings forth the principal-agent problem between the tangible assets provides (the principals) and the intangible assets provides (the managers). In general, the owner's objective is different from the manager's. The corporate owner needs to establish the incentive and obligation mechanism, which can align the interests of the manager with shareholders, to supervise and motivate the manager. All constitute the core units of the theory of the firm.Our traditional compensation system is seriously insufficient. Besides, the left over problems by traditional system make the executive problems more serious. Many talented people left those companies. The present compensational incentive program hasbecome the "bottle neck" for the continuing development of companies. In recent years,stock option program has been put into practice in some regions in China. However, because of the un-matching of internal and external environments, there appears many problems during the implementation of the practice. At the same time, in America, the origin of stock option, along the slump of NASDAQ market and frequent happening of corporation performance cheating cases. The defects of stock option are gradually coming out, which leads to doubts and introspection on stock option. An objective improvement must be applied to stock option.This article guided by science theories of accounting, management and finance, comprehensively analyses the exercise principle, summing up the advantages and defects of stock option program. It further analyses the defects of stock option in our country, proving that introducing long-term incentives, such as stock option into China is necessary and urgent. But, stock option is not so perfect by nature, and it brings changes to its premise as well as a serious of new problems when it was introduced into China. Through comparison of conditions for exercise stock option incentive program in and out China, this article puts forward many suggestions about relative conditions on law and regulations, capital market and company management. It also comes out with many improving methods aiming at causes of those defects. Finally, the article raises problems for implementing stock incentive program that should be noted under our uncompleted conditions, and actively designs the factors that stipulating the stock option, making the program adapt the conditions of our country.