A study on the Equity Incentive Mechanism of Chinese Listed Companies

At present, the issue of improving equity incentive of listed companies has been attracting more and more attention in china. In this article, with the frameworks of human capital theory and principal-agent theory as analytical tools, solutions are worked out as to the common problems with China's system of listed companies like lacking effective effective securities markets, well-developed markets of professional managers and mal-functioning governance structures in most of the listed companies. It's been pointed out that details worth notice when listed implementing equity incentive mechanism, such as the importance of implementing different mechanisms against different situation, paying attention to the way of implementing incentive mechanisms, and innovating ways of implementing mechanisms. By proving the hypothesis that perfecting equity incentive program designing, related policies and regulations and strengthening supervision on equity-based incentives are the preconditions of scientific implementation of equity incentive system. The specific available modes for implementing equity incentives are put forward, they are, stock options, management buy-outs, virtual shares, stock appreciation rights incentive model, performance shares, and transferring-savings-into-stock program..