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China to Conduct Stock Option Experimentation in Some High-tech Companies
The Chinese Ministry of Finance is going to conduct stock option test among some high-tech enterprise operators and backbones in expertise.
The stock option system is an incentive measure, which closely links the operator's contribution to the enterprise up with his personal interests. It enables operators to obtain stock rights by "using current price to buy capital in future" and he can use the "rights" to exercise his authority in his terms of office. It is different from the normal salary system or stocks granted to him as motivation or incentives to the operators.
According to Li Chunman, vice director of Enterprise Department under the Ministry of Finance the stock option system can motivate the enthusiasm of enterprise operators and backbone technicians in high-tech fields into play. It can make them to form a certain sort of flesh-and-blood relationship with the enterprises they are running so as to survive and flourish together. The stock option system is, in certain sense, not only a salary reform, but also a mechanism that can help change property ownership of an enterprise and so it's a reform of the system of ownership in a deep-going way.
China Unicom, Legend and other seven high-tech companies in Zhongguancun area are selected by the Ministry of Finance to be the first batch of enterprises for experimentation of the stock option system.
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