Hurry!!!! The role of incentive funds in equity incentives

Based on your question, Huayi Zhongchuang hereby gives the following:

1. Equity incentive is a method of long-term incentive for employees, which belongs to the category of option incentive. It is a long-term incentive mechanism implemented by enterprises in order to motivate and retain core talents. Conditionally give part of the shareholders' rights and interests to the incentive object, so that they can form a community of interests with the enterprise, so as to achieve the long-term goals of the enterprise.

2. Equity incentive is an incentive method in which operators obtain the company's equity in the form of enabling them to participate in corporate decision-making, share profits and bear risks as shareholders, so as to serve the long-term development of the company diligently and responsibly. At this stage, the equity incentive model mainly includes: option model, restrictive model, value-added right model, performance incentive model and virtual model.

3. 1. Selection of incentive mode.

The incentive model is the core issue of equity incentives, which directly determines the effectiveness of incentives.

2. Determination of incentive objects.

Equity incentive is to motivate employees, balance the long-term goals and short-term goals of the enterprise, especially pay attention to the long-term development and the realization of the strategic goals of the enterprise, therefore, the determination of the incentive object must be guided by the strategic goals of the enterprise, that is, the selection of the most valuable personnel to the enterprise strategy.

3. ** of stock purchase funds.

Since the target of encouragement is natural persons, the ** of funds becomes a key point in the whole planning process.

4. Design of assessment indicators.

The exercise of equity incentives must be linked to performance, one of which is the overall performance condition of the enterprise, and the other is the individual performance appraisal index.

Understand that the incentive is generally used to repurchase the target, and the stock after the repurchase is used to grant the incentive object **option or restrictive**, in which the exercise of **option ** is priced according to the higher of the stock price of the previous trading day or the average price of the previous 30 days according to the relevant provisions of the state, while the restrictive ** can be priced by the company independently, or even granted free of charge.

However, the use of incentive ** in private placement is a bit confusing, because it is clearly stated in the "Memorandum No. 1 on Equity Incentives" that incentive ** cannot be used to fund the purchase of ** or the exercise of rights by incentive recipients. So what I understand is that when the incentive ** is used for restrictive **, it is used to compensate for the difference between the discount and the market price (when the restrictive ** of private placement is granted to the incentive object, it can be issued at a discount, but the upper limit of the discount is 50% of the market price), and for ** options, it is to compensate for the difference between the exercise price and the market price during the exercise period (I really don't understand this).

I don't know if what I'm saying above is correct, but if it's not, how should I understand that there is a problem there? I hope someone will tell me more about it, thank you I have a lot of points, and if the answer is good, I will be generous to add

In practice, incentives are used to buy the company's stock, and the examples in the market are only used to buy restrictive products, and they don't seem to be used in private placements, let alone options.

Regarding Memorandum No. 1, from your understanding, if the incentive ** is used to compensate for the price difference, then the incentive object still needs to contribute capital in essence, and there is no difference between whether or not to withdraw the reward**, so what I understand is that the incentive ** can only buy stock**, not the increment**.

It's okay, I'll chase it as soon as I have time06

**What are the differences between the company's management incentives and the equity incentives of listed companies?

First, they are different in nature. Equity incentives include options, employee stock ownership plans, restricted incentive plans, and management buyouts.

MBO, the existing incentive plans of listed companies are mostly through private placement or secondary market repurchase for ** option incentives and restrictive ** incentives. The ** company is not listed because the shares are not listed, and the management equity incentive is largely there.

MBO, its success depends on the outcome of the game between management and major shareholders.

**The company's equity incentive is essentially that.

MBO, but until the details are conclusive, it can only make a neutral judgment on this. After the implementation of equity incentives, the impact on the interests of ** investors is the most concerned in the industry.

Second, from the perspective of the incentive range, the maximum amount of the company shall not exceed 20% of the total share capital, and the total number of shares involved in the equity incentive of the listed company shall not exceed 10% of the total share capital. However, because the share capital structure of ** companies is smaller than that of listed companies, even if the incentive ceiling is 20%, the number of shares is only a few million. The difference between the two is a long way off.

However, the industry generally believes that the significance of the release of the equity incentive of the company's source banquet is not the amount of the incentive, but the more far-reaching significance lies in the unification of the interests of the company's operators and owners.

Third, from the point of view of incentives, the equity incentive of listed companies is to improve the unreasonable salary structure of senior executives of listed companies in Shanghai and Shenzhen, and establish a long-term incentive mechanism linked to the operating performance of listed companies. For the company, the equity incentive can avoid the talent war caused by the accelerated competition in the industry, and avoid the impact of the company's frequent fluctuations in talents, especially management and core investment and research personnel, on the interests of investors.

Finally, judging from the hail silver results generated by the incentive, the equity incentive of listed companies will eventually improve the quality of Shanghai and Shenzhen ** companies, and the equity incentive of ** companies will make ** companies pursue management scale. After the equity incentive, the interests of the management of the listed company rely on its performance in the secondary market, and the secondary market relies on the company's operating performance. Therefore, the introduction of equity incentives for the management of listed companies can greatly promote the production and operation of listed companies and improve the quality of listed companies.

For example, the equity incentive plan proposed by G Vanke puts forward clear indicators for return on net assets and net profit growth, and only after these indicators can the management withdraw net profit to purchase Vanke**. After the implementation of equity incentives, the main factor that can determine the interests of the management is the scale.