The Introduction Of Equity Incentive Policy In Clothing And Textile Enterprises

Before 2010, only 2 of our textile and apparel listed companies focused on the implementation of the stock option incentive plan. From 2010 to 2011, a total of 10 textile and apparel listed companies launched equity incentive plans, of which 70% adopted options and 30% adopted restricted stock.

Equity incentive is no longer a novelty. It was considered to be the "classical law" of the western enterprise system more than 10 years ago and introduced into China.

However, in central and local state owned and wholly owned enterprises, equity incentive is always "big thunder and little rain."

However, according to the author's observation, under the pressure of regulators, the implementation of equity incentive in Listed Companies in recent years is booming, especially for textile and apparel listed companies. In order to maintain team stability and combat effectiveness, equity incentive is tilted to front-line employees.

Experts believe that the degree of equity incentive in China's listed companies is still insufficient, while textile and garment listed companies also have listed companies that terminate the equity incentive plan. However, this year's equity incentive plan will be implemented repeatedly, which will set an example for the equity incentive of the entire listed company.

3 companies terminate

In 2011, equity incentive of Listed Companies in China continued to grow rapidly in 2010 and entered the 2012.

According to incomplete statistics, as of April 17th, when the annual report was more than half disclosed, about 190 listed companies announced the announcement of equity incentive, which has exceeded the sum of the total number of companies offering equity incentive plans from 2005 to 2010.

At present, about 15% of listed companies try stock incentive in China.

Since the 2011 Annual Report has not yet been completed, the data from 2010 and previous years are selected for analysis.

According to the statistics of Shanghai Shang Dao executive compensation consulting center, as of the end of 2010, 167 companies in Shanghai and Shenzhen two cities have launched a more standardized equity incentive plan, accounting for only 8% of all listed companies, and nearly 35% of them have been stopped.

These data indicate that equity incentive in China's listed companies is still not completely out of the exploratory stage.

Since the second half of last year, with the gradual increase of equity incentive, equity incentive of listed companies has entered a critical stage.

According to the latest statistics of WIND, as of April 17th, since last half of last year, there are 168 listed companies that have announced the implementation of equity incentive.

Among them, 84 have been implemented, accounting for half of the total; 8 of the shareholders' meetings have passed the plan, accounting for 4.76%; 50 of the board's preliminary plans, accounting for 29.76%, and the remaining 26 have been suspended, accounting for only 15.48%.

Some experts believe that although the equity incentive of Listed Companies in China has been developing rapidly in recent two years, there are still many deficiencies.

With the data in 2011, only about 15% of the listed companies try stock incentive in China. In the mature markets of Europe and America, the proportion of companies providing long-term incentives exceeds 95%.

The author noted that before 2010, only 2 of our textile and apparel listed companies were launched and implemented the equity incentive plan.

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However, in 2011, the industry situation deteriorated and the two tier stock market went down. 3 companies terminated the equity incentive plan, including Weixing shares and Kaiser shares on Saturday.

The main reason for the termination of the equity incentive plan is that the change of the industry situation makes the company unable to complete the incentive goal of equity incentive and the price of the two tier market is lower than the exercise price.

This shows that the equity incentive of textile and apparel listed companies is entering a crucial stage.

Weixing shares: performance indicators difficult to achieve

According to the November 18, 2011 announcement, because of the low foreign consumption market, the rising labor costs and the impact of tightening policies, it is difficult to achieve the performance index of equity incentive, so the decision to terminate the second phase stock option incentive is terminated.

Weixing shares produce garment accessories such as buttons and zippers. By analyzing the profit changes of each quarter, it is easy to see that the performance of the second half of the year is down.

Saturday: equity incentive is no longer implemented in the first half of the year

In December 13, 2011, the company announced that, influenced by the international financial crisis, rising labor costs, and opening up new stores, the company estimated that the performance conditions for granting restricted stocks to the first phase restricted stock incentive plan were difficult to achieve.

The company decided to terminate the restricted stock incentive plan, and will not consider and disclose the equity incentive plan within 6 months, that is, no equity incentive in the first half of this year.

Kaiser shares: share price loses incentive function

The company announced in December 12, 2011 that since the disclosure of the company's restrictive stock incentive plan in November 24, 2010, the two level market volatility of the company's stock price has greatly increased, resulting in a substantial increase in the cost of capital purchase of restricted stock by the existing incentive object, which brings certain difficulties for the implementation of the company's restrictive stock incentive plan.

The price of the company's two tier market is lower than the company's restricted stock price, and the adjusted restricted stock price is 9.18 yuan / share. Now the company's stock price is 8.85 yuan / share, and it loses incentive function.

In view of the above reasons, the company decided to cancel the equity incentive plan.

The new equity incentive is aimed at stabilizing the team.

In contrast to the above three companies' equity incentives, the textile and garment companies listed on this year's disclosure of equity incentive programmes have obvious incentive to the front-line employees, highlighting the confidence of the company's management, and laying a firm foundation for maintaining team stability and fighting capacity.

In March 26, 2012, the company adopted the stock option incentive plan (Draft), and awarded 2 million 850 thousand stock options to the incentive target, accounting for 1.43% of the total share capital of 200 million shares, and the exercise price was 36 yuan.

In the 3 accounting years of 2012~2015, the weighted average return on net assets is not less than 14%, 16% and 17%, respectively. The net annual compound profit of 2011~2015 is not less than 32.69%, and the performance appraisal requirement is higher.

This equity incentive was awarded for the first time in 2 million 590 thousand cases, of which executives accounted for 520 thousand, accounting for only 18.25% of equity incentive shares, and the remaining 2 million 70 thousand were used to motivate 56 core and middle-level managers. This incentive target accounted for 2.92% of the total number of employees, and the incentive range was wide, which is conducive to maximizing the enthusiasm of employees and helping to achieve the operation goals of the company.

Since the beginning of this year, the stock has risen by 30.08%, winning 23.92 percentage points in the same period.

In the same period, the net outflow of funds was 10 million 441 thousand and 200 yuan, and the outflow rate was 0.33%.

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Nine Man Wang men's clothing: technician is the core of encouragement.

In February 8, 2012, the company issued the stock option and restricted stock incentive plan (Draft). It plans to grant 6 million 500 thousand stock options to the stock option incentive object, the exercise price is 21.73 yuan, and 6 million 500 thousand shares of restricted stock will be awarded to the restricted stock incentive object, and the price will be awarded 10.34 yuan.

The exercise conditions are based on the annual net profit of the company in 2010. From 2012, the net profit growth rate of the company in the next 3 years is not less than 44%, 72% and 107%, and the net assets yield is not less than 11%, 12% and 13%.

The plan involved 150 people, including directors, senior managers, middle managers and core business people.

Company director, deputy general manager and chief financial officer Zhang Jingchun, Wu Huirong and other 4 vice president are among them.

A wide range of incentives will help stabilize the whole management team.

Since the beginning of this year, the stock has risen by 6.21%, winning 0.05 percentage points in the same period.

In the same period, the net outflow of funds was 31 million 678 thousand and 200 yuan, and the outflow rate was 1.59%.

In February 9, 2012, the company announced the draft of the two phase of the equity incentive plan, granting 2 million 950 thousand stock options to the incentive target, and the stock source is private placement. This incentive accounts for 2.2% of the total share capital. First, it grants 2 million 660 thousand shares, reserves 290 thousand shares, and grants the stock exercise price 42.78 yuan.

The exercise condition is based on the net profit in 2011. The net profit growth rate of 2013~2015 is not less than 60%, 90%, 150%, and the weighted average return on assets is no less than 12%, 12.5%, 13%.

This equity incentive is mainly targeted at middle level core technology business personnel and middle managers, including regional sales, designers, store managers, etc., with a total number of 199, involving more personnel.

Company managers have a wide range of shareholdings, and the number of employees covered by the two equity incentive after listing is more than 500.

From the detailed list of incentives, the object of this incentive has further subsiding, especially the incentives of designers, sales representatives and business commissioners, and the proportion of middle managers has declined.

The company's wide range of equity incentives can help retain core personnel in the upper and middle levels and introduce excellent talents to promote the development of the company, so that the interests of the operators and shareholders will be consistent, and the company will be more concerned about the performance of the capital market.

This year, the stock has fallen by 6.12%, which has lost 12.29 percentage points in the same period.

In the same period, the net outflow of funds was 51 million 244 thousand yuan, and the outflow rate was 4.71%.