Last year, 560 equity incentives and employee stock ownership plans helped Shenzhen-listed companies develop stably and win-win for all parties

Our reporter Chang Xiaoyu

　　Equity incentives and employee stock ownership plans are an important benefit-sharing mechanism for listed companies, and an important institutional arrangement to give full play to the function of the capital market in serving the real economy.

A reporter from "Securities Daily" learned from the Shenzhen Stock Exchange that in 2021, Shenzhen-listed companies will launch a total of 419 equity incentive plans, involving 6,317.7462 million shares; 141 employee stock ownership plans, involving a total capital of 20.42 billion yuan and the number of shares 1,856.495 million shares.

　　"Equity incentives and employee stock ownership plans are important tools for listed companies to stabilize their talent teams and establish a long-term incentive mechanism. Equity incentives are mainly for the middle and senior management and core backbones of the company, while employee stock ownership plans are inclusive and have a wider coverage. ” Dong Zhongyun, chief economist of AVIC Securities, said in an interview with a reporter from “Securities Daily” that through equity incentives and employee stock ownership plans, companies, shareholders, employees and other parties can establish long-term and stable benefit sharing and risk sharing. The mechanism is conducive to achieving a win-win situation for all parties, enhancing the cohesion of employees, and enhancing the competitiveness of the company; it is conducive to the long-term stable development of the company, and further exerts the function of the capital market to serve the real economy.

　　A large number of beneficiaries

　　Focus on long-term incentives

　　According to statistics, from 2017 to 2021, the number of equity incentive plans launched by Shenzhen-listed companies was 280, 281, 218, 264 and 419, and the number of employee stock ownership plans was 164, 96 and 88 respectively. , 89 orders and 141 orders.

The number of equity incentive plans and employee stock ownership plans in 2021 will increase by 58.71% and 58.43% respectively compared with 2020, and the market activity will increase significantly.

　　Specifically, in 2021, the equity incentives and employee stock ownership plans of Shenzhen-listed companies will show three characteristics.

　　The number of beneficiary employees is large, and innovative companies are highly motivated.

In 2021, Shenzhen-listed companies will implement equity incentives and employee stock ownership plans involving a total of 180,400 company employees.

Technology-intensive industries dominate, especially computer, communication and other electronic equipment manufacturing, software and information technology services, electrical machinery and equipment manufacturing, chemical raw material and chemical product manufacturing, pharmaceutical manufacturing, and special equipment manufacturing etc., a total of 227 equity incentive plans were launched, accounting for 54.18% of the total plan, and 81 employee stock ownership plans were launched, accounting for 57.45% of the total plan.

　　Focus on long-term incentives and stabilize future development expectations.

In 2021, the average validity period of equity incentive plans launched by Shenzhen-listed companies is 4.62 years. There are 393 incentive plans with a validity period of 4 years or more, accounting for 93.79% of the plans launched in that year. There are 222 incentive plans with a validity period of 5 years and more. single, accounting for 52.98% of the programs launched that year.

　　Revenue and profit increased, and the effect of incentives and empowerment appeared.

According to statistics, for companies that implement equity incentives in Shenzhen in 2020, after excluding individual companies, their operating income in the first three quarters of 2020 and 2021 will increase by 12.17% and 38.75% year-on-year, respectively, and their net profit will increase by 44.79% and 26.75% year-on-year, respectively. and profitability are higher than the Shenzhen average.

　　Tian Lihui, dean of Nankai University's Financial Development Research Institute, told the "Securities Daily" reporter that equity incentives and employee stock ownership plans can align the interests of the company, shareholders, and employees, and form a long-term sharing mechanism for corporate growth dividends.

It can reduce the current salary expenditure of the enterprise and increase the capital investment for development.

It can empower the key minority and strengthen the market confidence of the company's good development.

　　New incentive schemes emerge

　　The second category of restricted stocks has become mainstream

　　At the same time, 2021 is the first year for the reform and full implementation of the equity incentive mechanism on the ChiNext. This reform introduces the incentive model for the second category of restricted stocks, and at the same time optimizes institutional arrangements in terms of grant price, incentive objects, and incentive scale. .

Since 2021, new equity incentive schemes for the Growth Enterprise Market have continued to emerge, and market enthusiasm has continued to rise.

　　The second category of restricted stocks has become the mainstream choice.

In 2021, a total of 171 GEM companies disclosed 238 equity incentive plans, of which 174 plans used the second type of restricted stock as an incentive tool, accounting for 73.11%.

The second type of restricted stock allows the company to register the granted shares in the name of the incentive object in stages after meeting the corresponding benefit conditions, breaking the restriction of completing the grant registration within 60 days, and the term of office has reached more than 12 months at the time of registration. The incentive objects for which the actual entitlement is registered can no longer be restricted from sale.

　　The "independent pricing" is released, and the plan is more flexible.

The new rules allow companies listed on the ChiNext Board to set their own prices for restricted stocks, while requiring financial advisors to express their opinions on the rationality of pricing.

In 2021, a total of 30 restricted stock plans will be granted with a price that exceeds the 50% discount limit, involving 194.4441 million underlying shares.

　　Relax the incentive object and incentive upper limit, and increase the incentive effect on talents.

After the reform of the equity incentive system on the ChiNext, shareholders or actual controllers holding more than 5% of the shares and their spouses, parents, and children are allowed to be incentive objects, and the upper limit of equity incentives is increased from 10% to 20%.

In 2021, the incentive objects of a total of 52 GEM companies include the above-mentioned entities, and the cumulative incentive equity of another 18 companies exceeds 10% of the company's total share capital.

　　Dong Zhongyun believes that through flexible and diverse incentive methods, GEM listed companies can better attract and retain talents, and fully stimulate the enthusiasm and creativity of employees, thereby enhancing corporate competitiveness, promoting industrial upgrading, assisting economic transformation, and realizing the capital market. high-quality development.

　　Further improve market inclusion

　　Better serve the national strategy

　　High-quality development is inseparable from supervision and escort. In 2021, Shenzhen Stock Exchange will adhere to information disclosure as the core, increase supervision of abnormal situations, guide listed companies to implement equity incentives and employee stock ownership plans in compliance, and strengthen business training to promote Establish a long-term incentive mechanism.

　　Tian Lihui believes that under the promotion of supervision, Shenzhen-listed companies can not only pay attention to employee incentives, but also prevent the transfer of interests from internal personnel; emphasize the flexibility of incentive methods and the standardization of plans; pay attention to both core teams and general employees. ; It not only emphasizes the actual strength of the incentive plan, but also pays attention to the recognition and benefit sharing of the shareholding plan.

It can be said that equity incentives and employee stock ownership plans have become an important driving force for the high-quality development of Shenzhen-listed companies.

　　It is understood that in terms of improving service quality and efficiency, Shenzhen Stock Exchange has made full use of the "Shenzhen Stock Exchange" through such forms as board secretary qualification and follow-up training, independent director training, "key minority" training, training on improving the quality of financial information disclosure and equity incentive seminars. "Innovation and Growth Academy" online learning platform, consolidate the company's awareness of rules, improve implementation efficiency, establish the correct concept of equity incentives and employee stock ownership, guide the company to link equity incentives with company strategies, and truly serve long-term development.

　　The Shenzhen Stock Exchange stated that in the next step, it will adhere to the work policy of "establishing a system, non-intervention, and zero tolerance" and the regulatory concept of "four awe and one joint force", continue to improve the incentive and restraint mechanism, and further strengthen the case practice and market demand. Institutional flexibility and adaptability, improve market tolerance, effectively improve the quality and efficiency of front-line supervision, support and guide listed companies to implement equity incentives and employee stock ownership plans in a compliant and efficient manner, give full play to the role of medium and long-term incentives, and promote high-quality development of listed companies. Better serve the national strategy and the real economy.

(Securities Daily)