The first equity incentive plan of science and technology innovation board was issued and the granting price broke the 50percent limit

category:Finance
 The first equity incentive plan of science and technology innovation board was issued and the granting price broke the 50percent limit


Compared with the current rules, the equity incentive system of KSG has made a number of institutional innovations, including broadening the scope of incentive objects, raising incentive cap, liberalizing restrictive stock prices, more convenient implementation, and so on. In the first single equity incentive, the grant price breaks the current 50% restriction, adopts the new implementation method, and makes full use of the rules.

Not only that, but there are further explorations in the draft. For example, we should set up corresponding implementation arrangements for different targets and performance, and choose gross profit as performance evaluation indicators, which is different from the previous ones. The more flexible the rules, the greater the operating space of enterprises, and the more obvious the effect of incentives. Some people in the market say.

Break the 50% price limit

Breaking the price restriction is one of the important innovations in the stock ownership incentive of SCM. The first equity incentive scheme brought the rule to the ground quickly.

Previous rules also left a mouth for less than 50%, but in practice it is not common. Innovation of rules in STB gives equity incentive more choice space. Wu Fei emphasized that the talent team building of science and technology enterprises is very important, and how to achieve deep binding with core talents is a matter of great concern for enterprises. Breaking the 50% price limit, increasing the incentive scale, and more important shareholders can participate in equity incentives, these innovations will motivate core employees of science and technology enterprises more vigorously.

Lexin Science and Technology Bulletin shows that the award price is set at 65 yuan per share. The pricing method is not less than 50% of the closing price on the first trading day after the companys initial public offering. Compared with other reference prices, this price is 39.61% of the average transaction price in the first trading day and 41.95% of the average transaction price in the first 20 trading days before the publication of the draft, breaking through the previous 50% limit.

It is worth noting that while Kechuangban liberalizes the 50% restriction and gives the company its own choice of price, the market also pays great attention to whether the low price with high percentage discount is suspected of profit transmission.

In this regard, Wu Fei explained that in accounting treatment, the difference between the fair value of restricted stock and the grant price will be included in the cost, which will affect the companys profits. Simply put, the larger the discount on the equity incentive grant price, the higher the cost the company will have to pay for the difference. Between profit performance and price advantage, the company and the majority shareholders will balance, and will not blindly pursue large discounts as incentives.

At the same time, the Listing Rules of Kechuang board require that if the grant price is less than 50%, listed companies should employ independent financial consultants to express their opinions on the feasibility of equity incentive plan, the rationality of relevant pricing basis and pricing methods, whether it is conducive to the sustainable development of the company and whether it is harmful to the interests of shareholders.

Ownership can be circulated

At the beginning of the formulation of the rules, the flexible implementation of equity incentives in KSG has attracted great attention from the market. Lexin Science and Technology has also adopted this equity incentive, and because of the system innovation, the restricted stock can be sold indefinitely and circulated after ownership.

The restricted stocks of Kechuang Board are divided into two categories. According to the rules, the first is that the incentive object obtains the shares of the company whose rights are limited according to the conditions stipulated in the equity incentive plan, and the second is that the incentive object who meets the conditions of the equity incentive plan obtains and registers the shares of the company in succession after meeting the corresponding conditions of benefit.

From a more rigid point of view, the first category is similar to the main board restricted stock. In practice, such restricted stocks need to complete the registration of changes after granting, and the ownership of stocks will be transferred accordingly.

Rules require that within 60 days from the date of approval of the equity incentive plan by the shareholdersmeeting, the company shall convene the board of directors to grant the first award of incentive to the target, and complete the registration, announcement and other relevant procedures. If the company fails to complete the above work within 60 days, the implementation of this incentive plan shall be terminated and the restricted shares not granted shall be invalid.

The disadvantage of this implementation is that if the company fails to meet the incentive conditions or the incentive target leaves the company, it will trigger the process of repurchase and cancellation of the shares already granted, which is more cumbersome.

In contrast, the biggest change of the second kind of restricted stock of Kechuang board is that it can not be registered at the time of granting, but can be registered to the incentive object after meeting certain conditions.

With the second type of choice, equity incentive will have more room and time to operate, which is more in line with the development characteristics of the company itself, and may become the preferred way to implement equity incentive in the future. The above market analysts said.

It should also be noted that in the second type of restricted stock, when the incentive target meets the benefit conditions and the listed company registers the stock into its account, the process is called ownership in the rules. This is a new concept in the equity incentive system of KSG. According to the listing rules, if the term of service of more than 12 months is included in the benefit condition at the time of attribution, then when the actual rights granted are registered, the time limit for sale can be no longer set.

According to the announcement of Lexin technology, the company clearly requires that the incentive objects shall serve for at least 12 consecutive months from the date of award to the date of the first batch of ownership. This means that this part of the shares can be circulated after ownership.

Re-innovation of optional action

The first equity incentive scheme of KSCP has also achieved multiple incentive effects. It not only makes full use of the rule innovation and enlarges the incentive effect, but also continues to make bold attempts in a larger space of autonomy to stimulate the subsequent program innovation.

For example, the draft sets different attribution arrangements for different objects, and corresponds to different attribution ratios for different performances. According to the announcement, according to the age of the company, the motivation objects are divided into two categories: the first type of motivation is for employees who have served in the company for more than one year, totaling 19 people; the second type is for employees who have served in the company for less than one year, totaling 2 people. The attribution period, the corresponding assessment year and the attribution conditions of the two types of incentives are different.

In addition, the draft also uses revenue or gross profit as attribution criteria for performance appraisal. However, the market participants pointed out that in the past equity incentive schemes, the assessment of net profit was more inclined to be the mainstream. Scientific and technological enterprises have many particularities. If only net profit may be distorted, the company can determine the assessment index according to its own situation, which can play a more incentive effect and be more effective.

Source: First Financial Responsibility Editor: Guo Chenqi_NBJ9931