Which is the Better of Stock Option and Restricted Stock:the Comparison of the Two Main Stock Incentives

The paper compares the rights and obligations,valuation,accounting,taxes of the stock option and restricted stock.It analyses the recent stock incentives of China's listed companies.It finds that the companies prefer the stock options and there are no differences in main industries which apply the stock incentives.The event study illustrates that the stock market responses positively to the stock incen- tives declaration but mostly for the stock options declaration not for the restricted shares.The author be- lieves that the restricted share is superior to the stock option and needs more policy support.