China Merchants Bank Has Launched An Employee Stock Ownership Plan.

This week, the main board of Shanghai stock market strengthened, and China Merchants Bank launched an employee stock ownership plan.

Everyone knows that large central enterprises and large state-owned enterprises are mainly concentrated in the main board of Shanghai Stock Exchange.

Similar effect of China Merchants Bank will be shown one after another.

First look at the data: the Shanghai Composite Index rose 6.27% this week, the Shanghai Composite Index 50 rose 8.33%, the Shanghai Composite Index rose 7.67%, while the Shenzhen Composite Index rose 0.97%, the small and medium board index fell 0.9%, and the gem index fell by 3.48%.

The main reason for such seesaw is China Merchants Bank.

In April 13th, China Merchants Bank announced that it would offer 434 million 782 thousand and 600 shares with no more than 8500 employees and raise funds no more than 6 billion yuan at the price of 13.80 yuan / share, all of which would be used to supplement the core tier one capital.

The participants of the shareholding scheme are: the core personnel who play an important role in the overall performance and long-term development of China Merchants Bank, including directors, supervisors, senior managers, middle-level cadres, key employees and senior managers of wholly owned subsidiaries.

The annual report shows that as of the end of 2014, China Merchants Bank has 75109 employees, that is, 11% of the backbone employees to participate in this plan.

In my view, the move can at least have the effect of killing three birds with one stone.

In the first place, there are so many employees, participating in the plan at the price of 13.80 yuan, and locking up the stock for 36 months, indicating that the price is undervalued.

In view of the fact that fundraising is used to supplement core tier one capital, and participants are decisive for the company's performance and long-term development, it will enhance the performance of the bank and broaden its development prospects.

Secondly, the barbarians outside the sniper.

The capital structure of China Merchants Bank shows that the largest shareholder of China Merchants Holdings has 12.54% stake, while the second largest shareholder has 10.72% stake in Ampang insurance, and the difference between the two shareholders is less than 2 percentage points.

As we all know, Ampang is a frequent placer.

Although the 435 million shares that the employee has increased is only 1.7% of the total share capital, 8500 employees and major shareholders are working together to effectively resist the barbarians at the door.

Moreover, the announcement also indicated that the plan is the first phase of the 2015 employee stock ownership plan, which will be launched in the next two years in principle, namely, the second phase and the third phase of the employee stock ownership plan, and the three phase of the employee stock ownership plan.

The total amount of funds is not more than 10 billion yuan.

Lenovo Vanke initially launched ESOP in partnership form, because its shareholdings were too dispersed, but only 1300 participants were involved.

Purchased, and the Bank of China is the two tier market price of ten percent off.

Third, the central enterprises have reduced their salaries.

In the first place, the top and middle level employees are also the main targets of reducing wages.

Originally, according to international practice, the salary of the senior managers of the listed companies should be "small head", and the "big head" should be linked to the performance.

Take Vanke, for example, in the overall decline of real estate, many of the top and middle levels of Vanke have switched their jobs. The employee stock ownership that originally bought at 8 yuan has now risen to more than 14 yuan, but in a year or so, it has already gained more than 70%.

This is a real benefit.

One of the contents of the mixed reform of state-owned enterprises is the implementation of ESOP. For this reason, the SFC issued the guiding opinions on the implementation of the ESOP pilot scheme in June last year.

The guiding opinions clarified the three basic principles of Employee Stock Ownership: compliance according to law, voluntary participation and risk bearing.

It is stipulated that stocks can be bought from listed companies, purchased directly from the two tier market, subscribed to non-public offering stocks, and voluntary gift from shareholders.

"The duration of holding the employee stock ownership plan in the form of non-public offering shall not be less than 36 months."

In view of this, similar to the China Merchants Bank's ESOP, it will be pushed out in a considerable number of state-owned enterprises (central enterprises) listed companies, especially those banks with relatively low valuation.

For example, the largest shareholder of Pudong Development Bank is China Mobile (holding 20%), several concerted action members of the state investment company add up to about 22%. Although China Mobile does not seek control at present, it is 20% after all.

Another example is Haitong Securities. Its largest shareholder, Shanghai Guangming group, has only 4.28% stake. It is more necessary to attract employee stock ownership.

Including a number of central enterprises that control the absolute degree of control, executives and middle level, backbone do not have a stake, can they do their best to improve the company's performance?