股权激励【外文翻译】

外文翻译

原文

EQUITY BASED INCENTIVES

Material Source: Society Professionals Author: Richard D Stock Incentive System (SIS), is a system a company adopts to incent managers or ordinary employees. In this system, to incent managers or

ordinary employees, a company will make them become stockowners by assigning a sum of stocks or stock options to them. Stock Incentive System Research on Outstanding Achievement, is a research base on the existing

Stock Incentive System. This research emphasizes on analyzing the pertinency between system structure and outstanding achievement. By

doing the research, the author tried to set up a pertinence relation

between practicing SIS and carrying out outstanding achievement to

enhance the efficiency of a Stock Incentive System. In this thesis, the

research is focused on the problems of outstanding achievement deviation,

capital resource for buying options or stocks, and short sight of managers. A lot of data and cases have been adopted to find out the bugs

from the existing SIS and set up a new model to enhance the efficiency

of the SIS. In this thesis, the author demonstrates the following ideas.

1. For the weak pertinence between stock price and outstanding achievement under the circumstance of the capital market, it is strongly recommended that the stocks from SIS not come into the market, or it will

be inefficient for incenting managers, further more, it may cause risks

of deceiving to incent market prices, which will ruin the company and

share holders utmostly. Then how to price the incentive stocks, and how

can the stocks be encashed? In chapter two, a pricing model of EVA has

been set up to answer the questions. In this model, there is linearity pertinence between the stock price and EVA. While priced by this model,

the increment of stocks get an only resource of outstanding achievement

made by managers, which will incent managers to work hard to increase

stock price. In this model, we can also find out that the capital resource

for stock encashment is exercise capital and EVA. 2.An favorable exercise

capital resource may be built up on capital bonus, which will enhance

the efficient of SIS by forming a benign incentive circle system. This system is named Capital Bonus Exercising System. Since the capital bonus is the only resource for exercise, and we know that managers’ outstanding achievement is the only resource for capital bonus, more outstanding achievement cause more bonus, more bonus cause faster and bigger amount exercise, more exercise cause bigger share hold for managers, and bigger share hold will cause more income, which will incent managers to work harder, then a benign incentive circle system is formed.

3. Since an SIS is used to get a long-term incenting, the managers’ stock holding period must be quite long, and a rule of exercising and encashing batch by batch must be prescribed. Firstly, the holding period must be quite long to realize long-term incentive function of SIS, or it will be not better than a cash bonus. For the incentive function will vanish once encashed, the stock holding term must be set long. Secondly, options or stocks must be exercised or encashed batch by batch in the holding period. Since the managers are with cash-predilection, in the other word, short-term income favoritism, if managers cannot get income before the end of the long term, their short-term income favoritism cannot be fulfilled, and then incentive function of SIS will be weakened. To get a harmony between long-term and short-term incenting, options or stocks must be exercised or encashed batch by batch. Furthermore, this prescription dividing managers stock income into batches will prevent managers from risks of short sight, and then the company can escape from disasters like Enron and WorldCom ever met. This thesis is a pilot study on Stock Incentive System based on outstanding achievement. It insists that practising a Stock Incentive System should be able to incent managers to carry out outstanding achievement and the incentive term should be quite long. And to get these effects, the key issues are to set up EVA models and built up a balance between short-term and long-term incenting. And most of the author’s efforts are being taken to settle these two issues.

The use of equity as a key component of executive compensation is probably the most difficult and controversial issue or manage by the compensation committee of a corporate hoard of directors. In theory, equity-based compensation should drive management to behave in a manner