Mindray Medical, which denies a large number of sales staff leaving, wants to put "golden handcuffs" on 2700 employees.

Earlier this month, Mindray Medical (300760.SZ) was once involved in rumors of falling short of expectations and a large number of sales staff leaving, and the stock price was also affected.

After denouncing the above rumors as "pure nonsense", Mindray Medical has now decided to take out real money and silver to put "golden handcuffs" on employees. On the evening of January 19, 2022, the company announced the 2022 employee stock ownership plan (draft), which is the first employee stock ownership plan launched by the company since the A-share listing in October 2018.

According to the announcement, the participants of the employee stock ownership plan are the core employees and technical backbones of the company, and all participants must sign labor contracts or employment contracts with the company or the holding subsidiary within the validity period of the employee stock ownership plan, and the total number of people participating in the stock ownership plan is not more than 2700 people, and the specific number of participants is determined according to the actual contributions of employees.

The total amount of funds of the ESOP shall not exceed approximately RMB152 million, and the source of shares in the ESOP shall be the common shares of Mindray Medical that have been repurchased by the Company in the special account for repurchase, with a total of no more than 3,048,900 shares, accounting for approximately 0.2508% of the total share capital of the Company. As of September 1, 2021, the Company has repurchased 3,048,900 shares of the Company's shares, accounting for 0.2508% of the Company's total share capital, through a special securities account for share repurchase, with a maximum transaction price of 335.00 yuan per share and a minimum transaction price of 316.18 yuan per share, with a total amount of approximately RMB1 billion (including transaction fees).

In addition to benefiting a large number of people, the low-cost incentive is a highlight of the employee stock ownership plan, and the price of the repurchased shares of the company under the employee stock ownership plan is only 50 yuan / share, while as of January 19, 2022, the closing price of Mindray Medical's secondary market is still as high as 335.22 yuan / share. In other words, if calculated according to this closing price, the motivated employees can earn 285.22 yuan per share, which is a huge profit.

In this regard, Mindray Medical explained in the announcement that on the basis of legal compliance and the company's existing cash compensation system, the company needs to further establish and improve the long-term incentive mechanism, so the incentive to achieve the participation in the employee share ownership plan at a lower incentive cost can truly enhance the enthusiasm of the participants, effectively unify the interests of the participants and the company and the company's shareholders, thereby promoting the realization of the company's overall goals.

Mindray Medical also set the performance unlocking conditions, during the lock-up period of this stock ownership plan, the participants need to pay the principal and bear the liquidity risk first, and only if the unlocking conditions of the company-level performance appraisal are met, the shares held by the employee stock ownership plan can be unlocked, and the specific first batch of unlocking is that compared with 2021, the net profit growth rate attributable to the mother in 2022 is not less than 20%; The second batch of unlocking is that compared with 2021, the growth rate of net profit attributable to the mother in 2023 is not less than 44%; the third batch of unlocking is that compared with 2021, the growth rate of the net profit attributable to the mother in 2024 is not less than 73%.

As of now, Mindray Medical has not disclosed the 2021 performance forecast, from 2018, 2019, 2020 these three years, the company's net profit attributable to the mother growth rate of 43.65%, 25.85%, 42.24%, respectively.

Boosted by the employee stock ownership plan, on the morning of January 20, 2022, Mindray Medical's stock price rose 4.11% to 349 yuan per share.