On Analysis of Some Problems in Stock-Option Motivation

Stock option has been accepted by many Chinese enterprises as a long term mechanism. After the mastery motivation has been clarified as the basis of option motivation, this paper further analyses some factors affecting the intensity of option motivation, i.e. market structure, attitude to risk, governing structure and trade differentiation. This paper also points out the reasons of weaker motivation intensity in oligopoly market. This paper suggests that stock option should be applied to developing high tech enterprises to strengthen the motivation. Finally, this paper states that in China the option motivation decision of managers should be accomplished by a third party outside the board of directors that has no bearing on managers.