Definition, Link And Type Of Share Based Payment

Definition and characteristics of share based payment

Share based payment is the abbreviation of "share based payment", and it refers to the enterprise's awarding of services for employees and other parties.

Two, the four main links of share payment.

Take the compensation stock option as an example, typical stock payment usually involves four main links:

The date of award refers to the date of approval of the share payment agreement.

The date of feasibility is the date when the exercise conditions are met, and the employees or other parties have the right to obtain equity instruments or cash rights from the enterprise.

European options need to be exercised on the right day of execution, such as the right to exercise in July 1, 2010, the granting of 100 thousand equity instruments to employees, the right to exercise 40 thousand shares a year later, and the right to exercise only after one year; American options can be exercised at any time during the waiting period.

So American options are more valuable than European options.

The date of exercise refers to the date when the employees and other parties make the right to obtain cash or equity instruments.

On the day of execution, enterprises must deal with accounts.

The selling date is the date of sale of the option stock that the stock holder will exercise the option.

Stock financing needs to set a stable image for the capital market, and shareholders are not easy to change frequently. Therefore, China has imposed a period of ban.

Three, the main types of share payment instruments.

(1) share settlement with equity settlement

Equity settlement of equity payment refers to a paction in which an enterprise settles shares or other equity instruments as a consideration for obtaining services.

The most commonly used tools for equity settlement are two categories: restricted stock and stock option.

(two) share settlement in cash settlement

A cash settled share payment is a paction in which an enterprise undertakes the obligation to deliver cash or other assets based on shares or other equity instruments for the purpose of obtaining services.