Seven Key Factors Of Equity Incentive Plan

< p > the object of encouragement is the best staff, so that every employee is closely tied up with the company, especially the key talents. It is also necessary to emphasize that "what I am is yours, yours is mine", and give some real shares so as to retain talents. But in the recession, shares can not play a big role. Enterprises may go bankrupt at any time, employees lack confidence in enterprises, and the shares are not as good as cash. Therefore, in order to give full play to the incentive function of stock ownership, we must make a plan that is in line with the current situation according to the development of enterprises. < /p >
< p > < strong > 1, incentive object < /strong > /p >
< p > incentive object, that is, the beneficiaries of stock, there are usually three ways. One is the participation of the whole staff. This is mainly in the initial stage, and the second is that most employees hold shares, which is mainly applicable to the high-speed growth period, retaining more talents to support the development of enterprises. The third is the key employees holding shares, the main beneficiaries are managers and key skills. There must be some principles for the choice of incentive objects. Employees who do not meet the requirements can not enjoy equity incentive. < /p >
< p > < strong > two, < a href= "http://www.91se91.com/news/index_c.asp" > excitation mode < /a > /strong > /p >
There are three types of medium and long term incentives: P, equity, option and benefit sharing. Each method has its advantages and disadvantages as well as specific prerequisites. For listed companies, options and equity classes are more suitable for non-listed company equity class and benefit sharing class is more suitable. But no matter which way we should adopt, we must take into consideration the organic combination of incentive mechanism and restraint mechanism, so as to give full play to the enthusiasm of employees. If only the incentive mechanism is taken into account without considering the constraint mechanism, the shareholding scheme may lose its utility. For example, the option class will not cause loss to the grantee if the grantee is not exercising right. < /p >
< p > < strong > three, total employee stock ownership and distribution < /strong > < /p >
< p > this part mainly deals with the total amount of equity incentives, the number of equity incentives per income, and the number of reserved stocks used for later incentives. How to determine the particularity of each company can be determined according to the actual situation, especially for listed companies, to be submitted to the SFC and the general meeting of shareholders. For each income person, the number of shares is basically determined according to the position. If the company is relatively fair in the job evaluation, the annual income level basically takes into account the value of the position in the company and the ability of the individual, so that the equity ratio can be determined according to the annual income. < /p >
< p > for newly inaugurated employees, especially senior executives, they generally need to enjoy medium and long term incentive plans when they enter the company. They can take a step by step policy, enjoy a 50% proportion in one year after the probation period, and enjoy 100% after one year. < /p >
< p > < strong > four, stock source < /strong > < /p >.
< p > the distribution of shares is mainly caused by the source of stock of listed companies is rather troublesome. The SFC shall examine and approve the shareholders' meeting. < /p >
< p > stock stock is a part of a company that repurchases its own shares from the market. These stocks are no longer held by shareholders, but their nature is issued but not circulated. The company will put the repurchased stock into the stock stock account. According to the stock option or other long-term incentive mechanism, the retained stock will be sold again at some time in the future. For example, the United States Yahoo Corp, by February 27, 1998, the total amount of stock options it bestowed is 11 million 140 thousand shares. The company has issued 8 million 350 thousand new stocks, of which 4 million 90 thousand shares have been used for employee's rights, and the remaining 4 million 260 thousand shares are the preparations for future employee's rights. In 1998, the board predicted that the company will continue to develop rapidly, the number of employees will surge, and the scale of stock option plans will continue to expand. To this end, the board decided to buy 2 million shares in the market to increase reserves. < /p >
< p > < strong > five, < a href= "http://www.91se91.com/news/index_c.asp" > buying mode < /a > /strong > /p >
< p > the way to purchase shares is the source of funds for buying stocks. Generally, employees have contributed cash in cash, the company has accumulated public welfare funds, welfare funds, companies or major shareholders, and employees have used their equity to mortgage loans to banks. These are good ways to operate, some ways will generate financial expenses, and tax payments should be repeated. The stock investment should not only pay investment tax, but also the investment income tax, and the stock repurchase can not be regarded as the cost to offset the tax. < /p >
< p > if there are no financial considerations, some companies will adopt the way of employee contribution purchase, and deduct money from the wage in proportion every month. This not only creates financing for the company, saves costs, but also improves the resignation cost of employees to a certain extent, which is conducive to the control of employees. < /p >
< p > < strong > six, exit mechanism < /strong > < /p >
< p > exit mechanism for employee exit incentive agreement, in the following three cases, often require employees who have enjoyed the right to withdraw from the stock exchange process, the first is the normal departure, that is, the expiry of the labor contract, no longer renewed staff, or retirement, business layoffs, or disability, death. Under such circumstances, enterprises will continue to allow these employees to enjoy equity or options according to the contract. The second one is abnormal departure. The labor contract is not full and the employee voluntarily leaves. If the employee's voluntary resignation does not cause losses to the company, it does not violate the confidentiality agreement, nor does it conflict with the equity incentive plan. Generally speaking, most companies can still allow shares that have already been granted. The third is to expel. In this case, it is in accordance with the relevant provisions to cancel the right to enjoy the proceeds of equity. < /p >
< p > < strong > seven, < a href= "http://www.91se91.com/news/index_c.asp > > management organization < /a > operation < /strong > /p >
< p > generally speaking, the implementation of equity incentive projects requires the establishment of a specialized group or department to manage the daily operation of the scheme implementation. This standing group or department should not only ensure an open, fair and equitable implementation of the equity incentive system, but also publicize the idea of sharing risks and enjoying the fruits together. The purpose of equity incentive is to mobilize the enthusiasm of employees and give play to the spirit of the owners, and seek common interests of enterprises in the medium and long term, avoiding the pursuit of short-term interests and damaging long-term interests. Therefore, we must constantly publicize this concept in order to motivate and retain talents. For example, an electronic trading company will hold a company wide meeting every Friday to report on the company's business and share dividends. Each employee can calculate his dividend income and fully mobilize the enthusiasm of all. < /p >
< p > some companies also adopt the way of trust holding. Generally, there are many listed companies, that is, an agreement is signed with the trust investment company, and the trust company acts as an agent to operate the transposition of shares. As long as the employee opens an account in the trust company, the trust company transfers the corresponding shares into the employee's account. When a company needs to send shares to its employees through stock repurchase or additional issuance, it is also handled by the trust company of the agreement, and the stock is entered into the employee's personal account according to the company's requirements. In this operation, the trust company will charge a certain fee. < /p >