How to determine the scope of incentive objects for the implementation of equity incentives?

Equity incentives. It is a set of long-term incentive mechanisms.

Upfront rule making and grant arrangements are very important. In the actual process of establishing the equity incentive system, enterprises are encouraged to combine and match their own long-term development plans, manpower scale and other factors to ensure that the incentive mechanism can play a greater effect.

Equity is a scarce resource, and the limited resources should be allocated to the most valuable objects for the realization of the company's current development plan. According to the purpose of the incentive to determine the scope of incentives, the incentive objects are not too many.

First of all, determine the purpose of the equity incentive, that is, the purpose.

Companies of different nature and size have different purposes for implementing equity incentives at different stages of development, some are to attract and retain core technical employees and management backbones who have a direct impact on the company's development, and some are to reduce the company's cash flow.

Some of the pressure and labor costs are to attract external talents, some to improve the company's performance, and some to repay and mobilize the enthusiasm of old employees.

Secondly, according to the purpose of the incentive, the incentive object is locked, that is, the person.

Usually, the incentive object is the core technical personnel and management backbone who have a direct impact on the development of the company, and the company can expand or adjust the scope of the incentive and lock the incentive object according to the purpose of the equity incentive.

If the purpose of the incentive is to reduce the company's labor cost, the incentive object should include the current employees who intend to reduce their salaries or the new employees who intend to reduce their salaries; If the purpose of the incentive is to attract external talents and improve the company's performance, the incentive targets should include the industry talents to be recruited and the core employees of the company's core business departments.

According to the purpose of equity incentives, the scope of incentives can be accurately located, and the precise positioning of incentive objects is more conducive to achieving the purpose of equity incentives.

The core elements of the design of the equity incentive plan are the designation of personnel, quantification, pricing, timing, capital, shares, performance appraisal, equity management, etc. According to Article 8 of the Measures for the Administration of Equity Incentives of Listed Companies, the incentive targets may include the directors, senior managers, core technical personnel or core business personnel of the listed company, as well as other employees who the company believes should be incentivized and have a direct impact on the company's operating performance and future development, but should not include independent directors and supervisors. Shares are far more attractive to managers than cash rewards, and even if managers leave the company after exercising their rights, they can share in the company's growth through equity.

There are three main types of equity incentives.

First, the existing core backbone employees: board members, senior executives and core backbone employees are very important human capital of the company, they are the main force of the company's value creation, so it is necessary to synchronize their personal interests with the interests of the enterprise, so that they can share the growth of the company's interests, so that they care more about the company's long-term value.

Second, employees who have made outstanding contributions in the process of enterprise development: Employees who have made outstanding contributions in the process of enterprise development may have been senior executives and core backbone employees of the company, and they have the company's resources in their hands, so even if they are based on interest considerations, the company should also consider these employees as incentive objects.

The third is future talents: equity incentives should not only take into account the historical contributions of employees, but also be based on the past and focus on the value that the future can bring to the company. We never encourage employees to sleep on their laurels, and only those employees who have high future value, great business potential, and can bring competitiveness to the company are worthy of great effort to motivate.

For this kind of employee equity incentive, it can also be said that the company invests in employees.

The implementation of equity incentives generally takes three forms: real shares, options and virtual shares.

It doesn't matter if you don't know, you can hand it over to Facaida, which is a more authoritative institution in the equity field, and they can tailor the equity incentive method according to the company's situation, and the landing effect is good. If you want to know more about it, you may wish to go to know and search for it.

The objects of equity incentives include the following types of honorifics: 1. Shen drafted directors, senior managers, core technical personnel or core business personnel of listed companies; 2. Other employees who the company believes should be motivated and have a direct impact on the company's operating performance and future development, but excluding independent directors and supervisors; 3. Do not belong to the personnel who are not allowed to be the object of incentives.

[Legal basis].

Article 8 of the Measures for the Administration of Equity Incentives of Listed Companies (2018 Amendment) may include the directors, senior managers, core technical personnel or core business personnel of the listed company, as well as other employees who the company believes should be incentivized and have a direct impact on the company's operating performance and future development, but shall not include independent directors and supervisors. Foreign employees serving as directors, senior managers, core technical personnel or core business personnel of listed companies may be eligible for incentives. Shareholders or actual controllers who individually or collectively hold more than 5% of the shares of a listed company, as well as their spouses, parents and children, shall not be eligible for incentives.

Who is the equity incentive for? The core principle of equity incentive distribution is to give to those who are optimistic about the company's future and are willing to grow with the company. In the early stage, the team has fewer people and more things, and everyone is the core backbone, so we will consider increasing the scope of incentives so that everyone has the mentality of entrepreneurial ownership, which is conducive to improving team cohesion.

When the number of people in the company increases, it is more important to identify and retain those talents who have the ability and potential to be missed.

What are the targets of equity incentives? Judging from the survey data of Cracks, less than 3 of the research companies have implemented full shareholding, and not every employee holds shares, but employees at every level have the opportunity to hold shares, and nearly seventy percent of the companies will focus on senior management, middle-level core positions, and professional and technical backbones, because they understand the company's development better, need to have long-term thinking, and will recognize the value of shares.

Legal Analysis: Determination of Equity Incentive Objects:

1.Directors, supervisors, senior managers, and core technical (business) personnel of listed companies;

2.Other employees that the company deems should be motivated;

3.However, independent directors and other persons prescribed by law shall not be eligible for incentives.

Legal basis: "Measures for the Administration of Equity Incentives of Listed Companies" Article 8 The incentive objects of the equity incentive plan may include the directors, supervisors, senior managers, core technical (business) personnel of the listed company, and other employees that the company believes should be motivated, but shall not include independent directors. The following persons are not eligible for incentives:

1) Those who have been publicly reprimanded or declared as an unsuitable person by the ** exchange within the past 3 years;

2) In the past 3 years, the China Securities Regulatory Commission has been given an administrative penalty for major violations of laws and regulations;

3) Those who are prohibited from serving as directors, supervisors, and senior managers of the company as stipulated in the Company Law of the People's Republic of China. After the equity incentive plan is deliberated and approved by the board of directors, the board of supervisors of the listed company shall verify the list of incentive recipients and explain the verification at the general meeting of shareholders.

Legal Analysis: Determination of Equity Incentive Objects:

1.Directors, supervisors, senior managers, and core technical (business) personnel of listed companies;

2.Other employees that the company deems should be motivated;

3.However, independent directors and other persons prescribed by law shall not be eligible for incentives.

Legal basis: Measures for the Administration of Equity Incentives of Listed Companies Article 8 The incentive objects of the equity incentive plan may include the directors, supervisors, senior managers, core technical (business) personnel of the listed company, as well as other employees that the company believes should be incentivized to make sails, but shall not include independent directors. The following persons are not eligible for incentives:

1) Those who have been publicly reprimanded or declared as an unsuitable person by the ** exchange within the past 3 years;

2) In the past 3 years, the China Securities Regulatory Commission has been given an administrative penalty for major violations of laws and regulations;

3) Those who are prohibited from serving as directors, supervisors, or senior managers of the company as stipulated in the Company Law of the People's Republic of China. After the equity incentive plan is deliberated and approved by the board of directors, the board of supervisors of the listed company shall verify the list of incentive recipients and explain the verification at the general meeting of shareholders.