With the year of the tiger approaching, some listed companies have released equity incentive schemes. On the one hand, they can be sent to employees as “year-end awards”. On the other hand, they can set performance appraisal for the team and promote operation. This can be described as killing two birds with one stone.
Data show that as of the closing on January 24, a total of 108 listed companies announced equity incentive plans during the month, of which listed companies in information technology, electronics, medical treatment, biology and other industries accounted for the majority.
the penetration rate of equity incentive continued to rise
The research results of futu enterprise service show that the penetration rate of A-share equity incentive continues to rise, showing a steady growth trend on the whole. Relevant data show that the penetration rate of equity incentive plans of A-share listed companies has quadrupled compared with 10 years ago, from less than 10% to 40%.
Yang Delong, an economist at Qianhai open source fund, told the Securities Daily that, “The main purpose of equity incentive in listed companies is to motivate employees and make the enterprise better. Equity incentive can not only mobilize the enthusiasm of employees, but also be beneficial to their personal interests. Therefore, the essence of equity incentive is to hope that the executives and employees of listed companies can strive to run the company well.”
“Although equity incentive will dilute the shareholding ratio of existing shareholders, from the perspective of company operation, on the one hand, it is conducive to the enterprise to attract and retain talents at a lower cost; on the other hand, it can build a community of interests and improve the enthusiasm of employees.” Wu Xijun, general manager of Guangzhou Hanma Investment Management Co., Ltd., told reporters.
At present, among the 108 listed companies that have announced the equity incentive plan, the performance assessment at the company level corresponding to the exercise of rights is also very particular. Some companies will take the performance of 2020 as the benchmark, while others will take the performance of 2021 as the benchmark. In terms of financial indicators, the growth rate of operating revenue is the main reference standard. In addition, deducting non net profit, earnings per share, return on net assets and compound growth rate of R & D investment are also important indicators of performance assessment.
“Of course, investors will favor the bright performance of listed companies, but when formulating exercise conditions and performance objectives, the company’s management should be combined with the internal and external environment of the industry, so as to achieve the balance of ‘increasing performance and improving morale’.” Wu Xijun said.
Yang Delong believes that “the gambling conditions set by different companies are different. Some conditions are easier to meet, while others are not. If the assessment conditions are set too high or too low, it is difficult to achieve the expected incentive effect. Therefore, the performance gambling conditions set by listed companies should be based on the standard that employees can probably complete through their efforts.”
the second type of restricted stock incentive has become the mainstream
In 2019 and 2020, the second type of restricted stock can be used as equity incentive on the science and innovation board and the gem. The second type of restricted stock is favored by most companies on the science and innovation board and gem because it has greater pricing discount than options and the first type of restricted stock, and has the advantages of flexible capital contribution, grant and ownership schedule.
According to the statistical data of market public information, in 2021, among the three major markets of the science and innovation board, the gem and the main board, due to the prominent talent intensive characteristics of the science and innovation board, the proportion of companies using the second type of restricted stock as equity incentive was as high as 93%, while that of the gem was 57%. The main board still mainly used the first type of restricted stock as equity incentive.
“Class I restricted shares” refers to the company’s shares invested and obtained by the incentive object at the grant price, which can be sold freely after meeting the unlocking conditions. “Class II restricted shares” do not need to contribute in advance. After meeting the benefit conditions, the incentive object can contribute to obtain the company’s shares at the grant price, and can be freely traded after the end of the restricted sale period. If the company does not set a sales restriction period, the incentive object can be sold according to relevant regulations after completing the share registration.
\u3000\u3000 “The second type of restricted stock enables the incentive object to avoid greater capital pressure due to the current high share price, and avoid frequent repurchase due to employee resignation and other factors, which improves the convenience of practical operation. It not only has the advantage that stock options do not need to contribute in advance, but also has the same price preference as the first type of restricted stock; it can not only provide more autonomy for the company Space, and can stimulate the enthusiasm of employees. Therefore, this method is very popular with companies on the science and innovation board and the gem. ” China Merchants Securities Co.Ltd(600999) said a sponsor representative who declined to be named.
Wu Xijun believes that, “In the process of equity incentive, the exercise conditions of performance gambling have a certain relationship with the makers and managers of performance objectives. Stable and mature enterprises tend to formulate relatively easy exercise conditions; radical and growing enterprises tend to formulate challenging exercise conditions, which can reflect the management’s concern for themselves and their employees to a certain extent Confidence and confidence in the development of the industry. “
