Problems of Stock Option Incentive in Private Listing Corporation and Countermeasures

In this paper, the authors study the Chinese private enterprises and the development status of China's capital market. The authors found that there are. many problems in the stock option incentive mechanism. In order to solve these problems, the authors put forward several countermeasures to improve the stock option incentive mechanism and stress that the private enterprise should effectively protect the interests of small shareholders, because the main agent problem in private listed companies is not the contradiction between shareholders and management, but the potential interest conflict between majority shareholders and minority shareholders. Meanwhile, boards of the companies should provide necessary supporting systems to improve the system, refine the specific rules, and give great efforts to rationalize the relationship among various systems.