However, without regulation, the real ESOP, as an incentive plan and a management tool, did not exist in China.

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Friday's guidance is conducive to standardizing existing phenomena of employees holding stocks, and establishing and improving a profit-sharing mechanism between employees and owners, according to CSRC spokesman Zhang Xiaojun.

But Zhang noted that the guidance did not cover policy measures on taxation. This leaves some analysts in doubt about the attractiveness of the program.

In the United States, where the ESOP originated, workers taking part in plans enjoy tax exemptions for their stock dividends. Similar tax rebates can be found in ESOPs for United Kingdom government employees.

Li Daxiao, chief economist for Yingda Securities, suggested tax exemptions in China's ESOPs.

"This will be an important factor to see whether a company's employees are willing to participate in its own ESOPs, and such choices may become an important reference for stock market investment," Li added.

According to CSRC spokesman Zhang, the commission is now working with relevant government departments on tax policies relating to ESOPs.