Over Half Of GEM Companies Seize Equity Incentive &Nbsp; Post Constraint Deficiency

As of June 21st, GEM listed companies had reached 86. After consulting all the prospectus, the reporter found that 45 companies had already implemented equity incentive before listing, accounting for 52.33%.

However, reporters found that the above 45 listed companies only provided conditions for obtaining equity incentive, such as meeting certain working years and certain performance conditions. However, it ignores the constraint conditions of the incentive object after obtaining the stock, that is, the duty that should be fulfilled after obtaining the right.

To a certain extent, this makes gem more and more like a feast for the original shareholders and executives.

People with investment banking say that equity incentive should not be a matter of getting employees' equity, but should have a strict system. The best way is to acquire stock rights conditionally. Only when the incentive target reaches the corresponding performance indicators, can the corresponding number of shares be acquired.

"Grab off" equity incentive

According to the prospectus, the reasons for the equity incentive of the 45 companies can be divided into two categories: attracting talents and stimulating talents.

For example, Li Si Chen's shareholders' spanfer of shares to Tang Hua and Lin Kaitao is mainly to attract talents, and two of them are senior managers to be hired by the company.

At the same time, "maintaining the stability of the top management team and motivating the work of the key employees" has become the most common official statement.

"In fact, in the initial stage of entrepreneurship or development stage, the implementation of equity incentive is a very desirable method because of insufficient cash flow or the need to accumulate funds for subsequent development." An investment bank official said.

According to reporter statistics, in the above 45 GEM companies, some companies actually implemented equity incentive in the initial stage of establishment.

Founded in May 18, 2001, Shenzhou taeyueh launched its first equity incentive in October 10th of that year. Anke was established in March 22, 1994 and equity incentive was implemented in August 10, 1995. The same case also includes Ding Han Technology and Northern Lu pharmaceutical company.

However, the majority of the company's equity incentive exists before the reform (or listing), that is, equity incentive occurs on the eve of the listing (or the eve of restructuring).

After the creation of dozens of billionaires on GEM, executives were not absent.

The reporters read the prospectus of the 45 companies, and found that most of the companies did not exceed the requirements of the regulatory authorities for the holding conditions of the stocks held by the executives.

"This may lead to the emergence of two situations: first, the incentive object to the equity incentive is mistakenly understood as the equity before the listing, thereby affecting the effect of equity incentive; two, after the expiration of the sale period, it may lead to the concentrated selling of the incentive object, or even cash in the post, which is equally harmful to the stability and development of the enterprise." The investment bankers believe that.

Post constraint deficiency

From the constraint conditions, the above 45 companies mostly show the precondition, that is, the incentive object can only get the rights of the subscribe company's stock only by meeting certain conditions, such as reaching a certain working life and certain performance conditions, but it ignores the constraint conditions of the incentive object after obtaining the stock vote, that is to say, after obtaining the right, it should perform its duties accordingly.

At the same time, equity incentive is a form of long-term incentive. The direct purpose is to attract and motivate talents and arouse their enthusiasm. The ultimate goal is to enhance the competitiveness of enterprises, create outstanding performance and achieve sustainable development.

In the opinion of the foregoing investment bankers, generally speaking, there will be no big problems in the performance of the listed companies. Therefore, they will not have a big negative impact on share prices. In this case, if the performance of listed companies is not required, the successful completion of the listing within four years of listing is a probability event.

"Moreover, the management obtains shares in the company, basically based on net assets, and some even the shares that the actual controller rewards. Such stocks are profitable if companies do not withdraw from the market and the price is lower." The above said, therefore, the detailed design of post constraint conditions is also very important, that is, after the listing, certain performance conditions will be satisfied, and the profits will be allowed to be sold in batches.

As a result, equity incentive should not cause employees to get equity, but instead, there should be a strict system. The best way is to acquire stock rights conditionally. Only when the incentive target reaches the corresponding performance indicators, can we get the corresponding number of shares.

However, two of the 45 companies still have post constraints.

The equity incentive target of Lai Mei pharmaceutical company promises that the number of Listed Companies in 2011 and 2012 will be multiplied by the number of Lai Mei Pharmaceutical Holdings held before the listing of the Lai Mei pharmaceutical industry. The growth rate of net profit after deducting the non recurring gains and losses from the previous year's audit by the Lai Mei pharmaceutical industry (if the net profit growth rate is zero or negative after deducting the non recurring gains and losses, and the shares that are listed on the current year are zero), since January 1, 2013, its shares in the pharmaceutical industry can be listed for circulation.

The promise condition of the core management of a robot is the annual compound growth rate of net profit for three consecutive years. That is, only when the net profit of 2007 years after the audited tax is calculated as the base, the annual compound growth rate of the net profit of each year in the 2008, 2009 and 2010 years is not less than 27%. The above persons can spanfer the total number of shares held by the company during the period from the date of the issuance of the official audit report to the first day of the official audit report in the next complete accounting year, and the final spanfer period is up to December 31, 2011.