On the evening of May 20, Gree Electric Appliances Inc.Of Zhuhai(000651) ( Gree Electric Appliances Inc.Of Zhuhai(000651) ) announced that the company plans to launch the second phase of employee stock ownership plan. According to the plan, the stock source of this ESOP is the shares previously repurchased by the company, with a stock size of no more than 94.728 million shares, accounting for 1.60% of the current total share capital of the company, and the overall capital size of no more than 1.55 billion yuan. The shareholding plan covers more than 12000 employees, of which the priority subscription proportion of middle and grass-roots cadres, core employees and technical experts is 97.47%, and the subscription share of other executives is no more than 2.53%. If there is any surplus, the chairman will subscribe again. The subscription price of this shareholding plan is equal to 50% of the closing price of 32.72 yuan / share on the trading day before the resolution of the board of directors.
It is worth noting that in 2021, the company launched the first phase of employee stock ownership plan, covering more than 4000 people. Insiders pointed out that this overweight action on the employee stock ownership plan will improve the internal management mechanism of the company and stimulate the core kinetic energy of employees.
establish and improve the long-term incentive mechanism
Gree Electric Appliances Inc.Of Zhuhai(000651) the employee stock ownership plan launched this time also responds to the call of regulators.
In April this year, the CSRC and other three departments jointly issued a notice on further supporting the healthy development of listed companies, pointing out that listed companies are encouraged to repurchase shares for equity incentive and employee stock ownership plans, guide listed companies to repay investors through cash dividends and share repurchase, and strengthen the market long-term investment concept.
Gree Electric Appliances Inc.Of Zhuhai(000651) as the leader of white electricity, since 2012, the net profit has increased from more than 7 billion yuan to more than 22 billion yuan for many consecutive years, up to 26.4 billion yuan. Since listing, the cumulative cash dividend rate has exceeded 100 billion yuan (including the dividend plan of 20 yuan for 10 shares in 2021). The total cash dividend per share implemented in the past three years has reached 9.70 yuan.
Compared with the generous performance return and dividend return given to the market, the company has not implemented equity incentive measures for employees for up to 13 years. In 2021, the company launched the first phase of employee stock ownership plan, covering more than 4000 people. Compared with the incentive policies of other enterprises in the industry and the growing talent demand under the background of industrial diversification, the lack of long-term incentive is a weakness in corporate governance.
Insiders pointed out that Gree Electric Appliances Inc.Of Zhuhai(000651) only launched the ESOP every other year, so as to improve the internal management mechanism of the company, stimulate the core kinetic energy of employees, promote the long-term development of the company with high quality and drive the further improvement of internal value.
employees have priority to subscribe
It is worth mentioning that the proportion of employees’ priority subscription reached 97.47%. Compared with the phase I shareholding plan, the subscription price is lower, and the lock-in time after ownership is reduced from retirement to 1 year, which greatly improves the enthusiasm of employees to subscribe. At the same time, the announcement shows that the company has also adjusted the assessment indicators of phase I.
Gree Electric Appliances Inc.Of Zhuhai(000651) said that the original performance target of the first phase of the employee stock ownership plan would still be implemented as the annual operation guide to keep the return on net assets stable at a high level in the industry.
assessment indicators take into account profitability and growth
According to the announcement, based on the clear growth of net profit and stable dividend, the second phase of the employee stock ownership plan has added a key assessment index “return on net assets”, which is more in line with the mainstream standards of employee incentive assessment of listed companies and the long-term characteristics of the household appliance industry, and the target setting is higher than that of comparable listed companies in the same industry, highlighting that Gree Electric Appliances Inc.Of Zhuhai(000651) is more focused on endogenous growth.
According to the announcement, Gree Electric Appliances Inc.Of Zhuhai(000651) has set the net profit of no less than 2 billion yuan and 3 billion yuan for each year of 2022 and 2023 respectively; The return on net assets in 2022 and 2023 shall not be less than 22% and 21%; The annual cash dividend per share shall not be less than 2 yuan or the total cash dividend shall not be less than 50% of the net profit of the current year.
Since 2021, the price of bulk raw materials has been high, and covid-19 pneumonia has recurred in many places in China. The tense geopolitical situation at the beginning of 2022 has further promoted the high fluctuation of bulk commodity prices, and the whole household appliance market is facing the risks brought by narrowing demand and industrial adjustment Gree Electric Appliances Inc.Of Zhuhai(000651) ‘s production and operation are facing severe challenges and tests. The establishment of assessment indicators that take into account profitability and growth through the employee stock ownership plan not only encourages employees, but also ensures the steady development of the company, which undoubtedly injects a “booster” into the capital market.
Market analysts believe that Gree Electric Appliances Inc.Of Zhuhai(000651) launched phase II stock ownership plan, adjusted phase I stock ownership plan and continued high proportion of dividends. The company aims to further improve the cohesion and competitiveness of employees, mobilize the enthusiasm and creativity of employees, promote the long-term, sustainable and healthy development of the company, and enhance the sense of value acquisition of shareholders, so as to realize the “tripartite win-win” of the company, employees and shareholders.
