The Research on Stock Options Encouragement Mechanism of Amoi Electronics Co.LTD
|School||Xi'an University of Technology|
|Keywords||Amoi Electronics Achievement Stock Stock Options Incentive System|
STOCK OPTIONS are the rights for the staff to buy certain amount of general stock of their own company at an agreed price permitted by their company in advance. Its purpose is to make higher position managers who have overall control of the company’s operation have priority of claiming surplus profit of the company while mangers have to shoulder risks. Nowadays, enterprises have to face how to motivate managers when Chinese companies, especially public companies, are trying to establish modern enterprise systems. Therefore, it’s very necessary to find out one long-term incentive system for public company managers by studying STOCK OPTIONS. It’s also very important to improve the manage system and achieve "Both Win"— managers and owners are all satisfied.This paper is using the example of Amoi to analyze the shortcomings of its current achievement stock incentive system, which are listed as below: (1) The essentiality of achievement stock is LATE BONUS DISTRIBUTION. The system is not a real stock right incentive system; (2) Its connatural limitation leads to an inefficient incentive system; (3) Obvious hysteresis of incentive function has bad effect on the achievement of this company. This paper is based upon the thesis of principle-agent theory and uses comparative analysis method to analyze and study that a new innovative system based on stock options can solve problems encountered by Amoi in managers’ incentive system.It includes below contents: (1)Analyzing the basis theoretic of stock options incentive system; (2) Analyzing and studying the feasibility and necessity that Amoi has to implement stock options incentive system in current marketing environment; (3)Analyzing the shortcomings of Amoi currently working achievement stock incentive system, and point out that Trust Management Methodcan be used to solve the problem of stock resources of stock options incentive system, so as to avoid the latter legal block caused by Chinese Corporation Laws and Security Laws; (4)Based on above analyzing, studying the practical significance for Amoi shareholder’s right incentive of using Trust Management Method to improve and redesign a stock options incentive system, and stressing in studying its project design, operating procedure, performance evaluation and monitoring as well as management of this system.In conclusion, this paper tries to establish one practical stock options incentive system for Amoi, and to certain degree, to solve the principle-agent problems between managers and owners, also hope it will be helpful to be used for reference by other public companies.