On The World And Boundary Of A-Share "Incentive" From The Perspective Of Zero Consideration "Conveying" Employee Stock Ownership "

Gree Electric (000651. SZ) "half price" employee stock ownership plan dispute is not over, zero consideration employee stock ownership plan has come into being.

According to the rough statistics of 21st century economic report, since this year, at least seven A-share listed companies have transferred the shares of repurchase accounts to the ESOP with the grant price of 0 yuan / share.

The latest one is kairun (300577. SZ).

According to the announcement on July 16, the first holders' meeting of the fourth phase employee stock ownership plan of carrun was held on July 15, which deliberated and passed the proposals on the election of members of the Management Committee of the ESOP.

The total shares of carrun's fourth phase ESOP are 389300 shares, which come from the shares already repurchased by the company's special repurchase account, with the repurchase price ranging from 23.26 yuan / share to 26.5 yuan / share. However, the 24 holders of the current ESOP of carrun shares do not need to contribute, and will acquire and hold the above repurchase shares in the form of zero consideration.

"Subsequent companies will continue to use repurchased shares to implement ESOP." On the afternoon of July 16, relevant personnel of kairun told the 21st century economic report that "the company has repurchased more than 740000 shares, and there is still more than 10 million yuan of repurchase quota not implemented."

Top executives are the biggest beneficiaries

Compared with the small number of kairun shares, the zero consideration ESOP of China Taiyue (300002. SZ) is typical.

According to the announcement of Taizhou Taiyue, the scale of its ESOP plan in 2021 is 25947900 shares, accounting for 1.32% of the company's total share capital. The ESOP will transfer the shares purchased by the company in the form of zero consideration.

The corresponding repurchase price of Shenzhou Taiyue is 3.45 yuan / share to 4.31 yuan / share, so the total amount of 2021 ESOP payment is 100.9735 million yuan (excluding transaction costs).

But this kind of good thing is not the same as rain.

By the end of 2020, the total number of employees of Taiyue in Shenzhou is 3062. The number of participants in this ESOP plan is no more than 100, including 6 directors, supervisors and senior managers, and no more than 94 core backbone employees.

It is worth noting that the six directors, supervisors and senior executives of Taiyue in Shenzhou accounted for 64.59% of the total share of the zero consideration ESOP, and chairman and President David Mao took 10.3792 million shares of 40% of the total shares.

By the end of July 16, the stock price of Taiyue was 4.83 yuan per share, which was equivalent to making 50.01315 million yuan from David's lying down. The salary of Mao David is also the highest in Taiyue, China, at 2018200 yuan.

"The incentive is relatively strong, but it is legal and compliant." "The actual controller of the company is getting older, and now he is only a director. It is only a few months since David assumed the post of chairman of the board of directors."

According to the data, Mao David, born in 1980, has served as the director of Shenzhou Taiyue since May 2018, the president since September of the same year, and the chairman and president since February 2021.

In fact, it is not uncommon for directors, supervisors and senior executives to transfer repurchase shares to ESOP at zero consideration.

Giant network (002558. SZ), which completed the transfer of all the underlying shares in April this year, has a shareholding scale of 60.7314 million shares, accounting for about 3% of the total share capital of the company, and 15 participants. Among them, Wu Meng, the co general manager, granted 19.434 million shares of 32% and Meng Wei, the Secretary of the board, accounted for 8.0975 million shares of 13.33%.

The above employee stock ownership plans of giant network are transferred to self repurchase shares at zero consideration, and the total cost to be confirmed by the company is expected to be 866.637 million yuan.

In this regard, some senior executives of listed companies said that the zero consideration ESOP should be inclusive, with a high proportion of directors, supervisors and senior executives as the main beneficiaries, and there is suspicion of interest transmission.

However, the relevant listed companies also have high sounding reasons.

"These are all efforts to create performance for the company and ensure the stability of employees." According to the above-mentioned people of Taiyue in Shenzhou.

The examination threshold is various

Investors and regulatory authorities pay close attention to the performance evaluation indicators of zero consideration ESOP, but the relevant listed companies set various thresholds.

Giant network's ESOP is based on the three years from 2021 to 2023 as the performance evaluation year. When the accumulated net profit of 3 years reaches 2.7 billion yuan, about 20.2438 million shares will be released; If it reaches or exceeds 3.9 billion yuan, it will be all unlocked.

Regular reports show that, in addition to the net profit of 820 million yuan in 2019, the net profit of giant network in 2016, 2017, 2018 and 2020 is more than 1 billion yuan, which means that its unlocking conditions are similar to the average annual performance before.

Although giant network performance assessment has a large flexibility space, but the expected performance of Shenzhou Taiyue is very clear.

Shenzhou Taiyue ESOP is to be released in two phases, with 50% and 50% respectively. The two unlocking periods are based on the net profit in 2020. The growth rate in 2021 and 2022 is not less than 15% and 25% respectively, or the total net profit in 2021 and 2022 is no less than 840 million yuan.

As a result, the net profit of Taizhou Taiyue in 2020 is 351.15 million yuan, the expected net profit in 2021 is 403.8 million yuan, and that in 2022 is 438.9 million yuan.

In response, Taiyue said that in order to effectively reflect the principle of giving consideration, incentive and restraint, the employee stock ownership plan has set up the above more stringent and challenging performance evaluation indicators based on the highest operating performance of the company in the past four years.

In fact, the current profit growth rate of Taiyue has exceeded the assessment growth rate. According to the forecast, its performance in the first half of this year has increased by 50.2% - 94.92% year-on-year.

"Reasonable profits can be (included in the performance appraisal), there is no limit. If the investment direction is correct, the profit from selling assets is also included in the performance appraisal." The above-mentioned relevant personage of Taiyue in Shenzhou told reporters of the 21st century economic report.

The unlocking condition of perfect world (002624. SZ) can choose any index. Based on the operating revenue and net profit in 2020, the growth rate of revenue or net profit from 2021 to 2024 is no less than 20%, 30%, 40% and 50%.

Star Technology (002132. SZ) is based on the net profit in 2019, and the growth rate of net profit in 2021 and 2022 is no less than 80% and 150% respectively.

The net profit of Star Technology in 2019 is 84.8453 million yuan, with a year-on-year increase of 44.15% in 2020 to 122 million yuan. In the first half of this year, it is expected to increase by 102.28% - 147.23% year-on-year, reaching 90 million yuan-110 million yuan. The upper limit is not far from the performance evaluation of this year.

For why to adopt zero consideration ESOP, Star Technology's statement is also quite representative.

Star Technology believes that from the perspective of the effectiveness of employee incentive, if employees need to bear a certain cost of capital contribution in the early stage, affected by market price fluctuations and the limitation of employee financing period, employees may not be able to obtain positive returns corresponding to their performance contribution, and eventually lead to poor incentive effect.

"In order to fully mobilize the enthusiasm and creativity of the company's directors, supervisors, senior executives and other core backbone personnel, and improve the cohesion of employees and the competitiveness of the company, reasonable company level performance evaluation indicators are set on the basis of the holders' free share of the plan, supplemented by performance assessment requirements at individual level, which can fully convey the company's vision for future performance growth." Star Technology said.

There is no reason for performance appraisal

In addition to the above listed companies such as kairun shares and star technology, since this year, Sifang Da (300179. SZ) and Taoli bread (603866. SH) will buy back shares at zero consideration for ESOP.

However, for this kind of shareholding plan without cost, kairun shares, sifangda and Taoli bread did not set performance appraisal targets.

"We don't have a lot of zero consideration, and the conferring personnel are not the chairman and President, and the previous equity incentive assessment has not reached the standard and has been cancelled." The relevant personnel of kairun shares explained to the reporter of 21st century economic report.

Sifangda has obtained 286400 shares from repurchase shares at zero consideration in the second phase of ESOP transferred in June this year and granted 49 persons with a lock-in period of 48 months.

"Not setting unlocking short-term performance goals is more conducive to the core core employees to increase their recognition of the company, and is conducive to employees' continuous attention to the realization of the company's long-term strategic objectives, rather than short-term performance and stock price fluctuations." Sifang said in the announcement in reply to the concern letter of Shenzhen Stock Exchange.

Although Taoli bread has not set performance appraisal target, it emphasizes on individual assessment.

According to the previous announcement, the number of employees participating in the fifth phase of Taoli bread ESOP is no more than 200, the maximum number of shares granted is 46.27 million shares, and the duration is 48 months. The shares come from the repurchase account, and the employees do not need to pay any fees.

"The uncertain factors in the development of the epidemic will affect the company's performance to varying degrees. Under the current industry environment and market performance, it is challenging to maintain the goal of rapid growth of performance." Peach and plum bread explains the reason why there is no performance appraisal index matching zero consideration.

Taoli bread also said that the company has formulated a sound assessment system for individuals, and the board of directors will adjust the list and distribution proportion according to the evaluation results of each person, "the completion of individual performance evaluation indicators will promote the growth of the company's overall performance.".

However, there are differences between the fifth period ESOP and the previous disclosure. According to the announcement on March 5, the number of shares in the fifth phase of ESOP is 1017800 shares, which are transferred at zero price by the company's special repurchase securities account.

As for the implementation of employee stock ownership plan for shares bought back with zero consideration, the staff of Taiyue and kairun shares in Shenzhou said in an interview with the 21st century economic news reporter that there is no obstacle in supervision.

The incentive mode of "stock repurchase + Employee Stock Ownership Plan" funded by listed companies is attracting more companies because of its high temptation to directors and supervisors. According to incomplete statistics, seven listed companies such as focus media (002027. SZ) and huanxu Electronics (601231. SH) implemented the employee stock ownership plan of zero consideration transfer and repurchase shares last year, but this year there is a trend of catching up and surpassing.

?