SHANDONGＵＮＩＶＥＲＳＩＴＹ ＯＦ ＴＥＣＨＮＯＬＯＧＹ
外文翻译
学 院： 商学院
扳手简笔画
专 业： 会计系
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学 号： ******6342
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2011 年 6 月
SOE Execs: Get Ready For Stock Incentives
TAN WEI
Stock option incentive plan will soon be available to state-owned enterpri executives, but will it lead to greater prosperity or new problems?
A trailblazing new scheme to infu state-owned enterpris (SOEs) with incentive stock options is under way. It’s a plan that may bolster company performance, but it’s not without risks.
炸酱面做法On August 15, Li Rongrong, Minister of the State-owned Asts Supervision and Administration Commission (SASAC), disclod that after careful study, a stock option incentive trial plan will be carried out in the listed SOEs. 爆爆珠是什么做的
山区小孩According to the trial plan, about 102 A-share listed SOEs are expected to be the trial companies. The short list of some of tho expecting to participate includes: China Unicom, Citic Group, Kweichow Moutai, China Merchants Bank and Beijing Financial Street Holding Co. 拌粉皮
Stock option incentive plan is designed to entice executives to work hard for the long - term development of their companies. As stocks ri bad on company performance, they too gain through this profits haring arrangement. This kind of incentive plan is popular in foreign countries, especially in the United States, where stock options can account for as high as 70 percent of a CEO’s income. Further, many economists believe the stock option incentive plan optimizes corporate governance structure, improve management efficiency and enhance corporate competitiveness.
On the other hand, after the Measure s on the Administration of Stock Incentive Plans of Listed Companies was issued early this ye a r, some of the companies turned out to have misud the incentive stock options. The result was insider dealings, performance manipulation as well as a manipulation of the company stock price.
“Although the stock option incentive scheme is a frequently ud tool to encourage top management, it could also be a double - edged sword especially in an immature market economy,” Li said. The SASAC is therefore taking a cautious approach, placing explicit re
quirements on corporate governance, the target and extent of the incentive measures, Li added.
弦子歌曲Li stated that the overas-listed SOEs would be the first few companies that will implement the mechanism becau of their sound management structure and law-abiding nature. Then the domestic listed SOEs will have the chance to embrace incentive stock options, which would be promoted if the trial results were good. 电视剧银狐
Executive face-lift
As for more than 900 listed SOEs, the personnel structure of the boards of directors will pro b ably face substantial change. That’s becau the plan states that if the s t o ck option incentive mechanism is going to be implemented in listed SOEs, external directors should account for half of the board of directors.
The trial plan introduced the concept of external directors for the first time. The external director should be legally recommended by directors of listed SOEs, and should not be w
樱花什么时候开花orking in the listed SOEs or in a holding company, said the plan. However, currently, most of boards of directors of listed SOEs are not in compliance with the requirement. They have to readjust the structure of board of directors to fit in with the new mechanism.
“For most of the SOEs which are listed in the A-share market, their boards of directors are made up of non-external directors and independent directors, which means that apart from independent directors, members of board of directors are all working for the listed company or for the large shareholder,” said Zhu Yongmin, an economist with the Central University of Finance and Economics. “If the stock option incentive mechanism is to be carried out in tho companies, a large-scale restructuring of board of directors is unavoidable and external directors must be introduced into the board.”
China Securities Regulatory Commission (CSRC) stipulates that an independent director is one who doesn’t hold another office beyond his job as a director, and has no such relations with major share holder that would interfere with the exerci of independent and objective judgment.
“Currently, the independent directors of listed companies can be categorized as external directors,” Zhu said. “However, the definition of external director is much broader than independent director. Tho who work for a company which has business ties with a listed company, though they do not meet the requirements of being an independent director, but can be considered an external director.”
Additionally, the trial plan also stipulates that the salary committee of listed SOEs that exerci the stock option incentive mechanism should be compod of external directors. However, for most of the listed companies, there are still non - external directors. As a result, a considerable number of listed SOEs need to transform their salary committee to fulfill the prerequisites of the stock option incentive mechanism.
