China's Enterprises To Implement The Stock Option Incentive System

Along with the improvement of market economy and the deepening of economic restructuring, there have been some new breakthroughs in Chinese enterprise reform about the internal management, the external environment and property right, but the progress in the incentive mechanism reform is actually slow. The enterprise reform needs the correlative incentive mechanism to take the strut. "The Central Committee of the CCP's Certain Major issues Decisions about State-owned Enterprise Reform and Development", explicitly proposed to establish and perfect state-owned enterprise operator's incentive and the constraint mechanism, and continue to research all kinds of incentive pattern which manager's suspension is based on enterprise's achievement.Recently, the Stated-owned Assets Supervision and Administration Commission of the State Council issued "State-owned Enterprise Further Reform Work Implementation Opinion" in December 19, 2005. It limits manager to expand the stock through increasing the capital, but encourages rewarding manager stock or stock option.Through introducing executive stock option's connotation, the rationale and the movement mechanism, as well as the overseas practice of stock option, and the appraisal, this article analyzes the stock option incentive mechanism's present situation, the necessity and the barrier in Chinese enterprise from static angle, analyzes the stock option system's prospect in China from dynamic angle, and puts forward the related countermeasure and proposal.The paper is constituted of five parts: First part is stock option Introduction. It includes stock option's connotation, rationale and move mechanism. Second part introduces stock option's implementation condition in western nation. Taking US as an example, this paper introduces its development course, the integrant part, the type, and the appraisal. The third part as the main body, analyses the stock option incentive mechanism's present situation in China. First of all, it classifies China's stock incentive forms. Then, using entrust-agent and human capital theories, combining the Chinese enterprises'interior condition with the enterprises'external environment, it...