After Shentong Express (002468.SZ) threw out the 1 yuan / share "fracture price" employee stock ownership plan, Fuguang shares (688010.SH) was more "generous" and directly gave the repurchased shares to employees free of charge and unconditionally. There are many controversies and doubts in the market, such as whether the above behavior involves the transmission of benefits.
Is there an anomaly behind the "cabbage price" of the employee stock ownership plan of the listed company?
Xingong Consulting partner Wu Siying told the first financial reporter that this phenomenon is actually not uncommon, the current repurchase type stock ownership plan is lower than the market price of nearly one-third of the case, the listed company may be based on the employee's historical contribution to do incentives, binding talents, optimize the salary structure, linked to the market value, promote performance and other factors, of course, do not rule out that some companies implement the employee stock ownership plan has a certain interest tilt, in this case investors will pay more attention to whether the company can afford the diluted cost, How long it takes to bind employees, how to evaluate, whether there will be better performance in the future, etc.
Unconditional free stock grants raise doubts
On the evening of January 15, Fuguang issued an employee stock ownership plan with zero price and no performance appraisal target, which immediately attracted market attention.
According to the Fuguang Share Chaser No. 1 Shareholding Plan (Draft), the shares of the shareholding plan were acquired and held by the company's repurchased shares at zero price, and there is no need to participate in the capital contribution. The size of the shares does not exceed 120,000 shares, representing 0.08% of the company's current total share capital.
It is worth noting that this part of the free shares given to employees is repurchased by Fuguang shares at an average price of 26.01 yuan per share, which is calculated at a total price of about 3.12 million yuan. In addition, Fuguang shares expect that the total share payment expenses will be 3.1848 million yuan, which will be amortized in three years.
The participants of the ESOP are directors, supervisors and backbone personnel who do not include independent directors, and the total number of people does not exceed 81, of which 10 are directors and supervisors without independent directors.
Not only free delivery, there is no assessment conditions. The explanation given by Fuguang shares is that the personnel participating in the shareholding plan are the core management team and backbone personnel of the company, which has an important impact on the company's business development and strategic realization, which is intended to prevent the loss of talents, enhance the stability of the talent team, and mobilize the enthusiasm and creativity of employees.
In this regard, some market participants have questioned whether such an unconditional and zero-cost gift of employee stock can really play an incentive effect. Doesn't the weak profitability of Fuguang shares need assessment targets to mobilize the enthusiasm of employees?
Judging from the performance of Fuguang shares, the company's revenue from 2018 to 2020 is almost stagnant, with a year-on-year increase or decrease of about 5%; The net profit attributable to the mother was flat in the previous two years, falling by 44.64% year-on-year in 2020, and still in the first three quarters of 2021, a decline of 8.69%.
The "fracture price" was also questioned for the low conditions of exercise
Similar to Fuguang shares, Shentong Express threw out an employee stock ownership plan of 1 yuan / share, which was also questioned by the market.
On the evening of January 14, Shentong Express threw out an employee stock ownership plan, participating in the directors, senior management, core management and core backbone employees who were determined by the board of directors to have an important role and influence on the overall performance and medium- and long-term development of the company, with a total number of no more than 124 people (excluding reserved shares), and the purchase price of repurchased shares was 1 yuan per share.
According to the announcement, the total number of shares in the employee stock ownership plan does not exceed 19.5599 million shares, accounting for 1.28% of the company's current total share capital, of which 14.3564 million shares are used for employees who participate in the employee stock ownership plan for the first time, and the remaining 5.2035 million shares are transferred as reserved shares within the time specified in the employee stock ownership plan.
At that time, Shentong Express repurchased the above shares, the highest transaction price was 15.50 yuan / share, the lowest transaction price was 9.16 yuan / share, and the total transaction amount was 236 million yuan (excluding transaction costs). Shentong Express preliminarily predicts that the total share payment expenses that should be recognized are 115 million yuan, which will be amortized from 2022 to 2025.
According to the latest stock price of 8.34 yuan per share on February 16, Wang Wenbin, director and general manager of Shentong Express, the largest subscriber of the employee stock ownership plan (who intends to subscribe for 2.9812 million shares), directly received more than 20 million yuan in incentive funds.
In addition to the cabbage price of 1 yuan / share, while the market attention, the exercise conditions of Shentong Express's employee stock ownership plan have also been accused of being too low. As a result, most investors questioned that the employee stock ownership plan was suspected of conveying benefits to management.
According to the announcement, Shentong Express's employee stock ownership plan has two assessment periods: the first is that the growth rate of express delivery business volume in 2022 is not lower than the growth rate of the express delivery industry in the current year or the net profit attributable to the mother in 2022 after deducting non-deductions; The second is that the growth rate of express delivery business volume in 2023 is not less than the growth rate of the express delivery industry in the current year or the net profit attributable to the mother after deducting non-deductions in 2023 is not less than 500 million yuan.
According to the 2021 annual performance forecast, Shentong Express expects a loss of 840 million yuan to 950 million yuan, compared with a profit of 36.3273 million yuan in the same period last year.
Shentong Express explained the reasons for the change in performance, saying that due to changes in the express delivery market in 2021, the company's asset investment and the provision for asset impairment matters, the annual performance is still under pressure, if the impact of the above asset impairment matters is excluded, the company's performance in the fourth quarter of 2021 is expected to achieve profitability.
The ESOP looks at these key points
So, why do listed companies grant the "cabbage price" of repurchased shares to employees, and what key points in the employee stock ownership plan do investors need to pay attention to?
Wu Siying told the first financial reporter that in fact, it is not uncommon for employee stock ownership plans in the market to grant employees at low prices, and it is estimated that nearly one-third of the cases are currently lower than the market price, and there are two reasons for this phenomenon:
First, in terms of policy, the employee stock ownership plan is different from the equity incentive plan, and the equity incentive plan has a clear pricing basis in the applicable management measures, which is not less than 50% off the market price in principle, and if it is lower, it is necessary to issue a financial opinion and the assessment requirements will be relatively higher; The rules of the employee stock ownership plan have not been updated since 2014, during which the constraints are relatively few, and there is no clear how to price, and the model of stock source for repurchase also allows more listed companies to have greater autonomy, and even zero consideration to employees, but the higher the relative interest, the higher the cost that the company needs to accrue, which depends on whether the company can afford the cost in exchange for higher performance contributions in the future, if the two can be balanced within the company, the low consideration is reasonable.
Second, it is necessary to see how long the stock ownership plan is cashed out for employees, such as two or three years or longer, in fact, the core issue is whether employees can bring more contributions to the company, including whether employees are willing to continue to serve the company. Some companies grant employees stock at low prices, and a big factor is to bind more holding time and retain talents.
In the case of Fuguang shares, the point of contention this time is the free and unconditional gift of shares to employees. In this regard, Wu Siying believes that this matter can be viewed relatively dialectically, according to the announcement, the company's employee stock ownership plan is designed based on factors based on the historical contribution of employees. On the one hand, some companies did not do too much equity incentives before listing, and the first thing after listing is that they need to share a wave of equity based on historical contributions; On the other hand, fuguang shares did not grant many shares to executives this time, up to 0.38 million shares, and the company also launched the first and second class restricted stock equity incentive plans.
In Wu Siying's view, the employee stock ownership plan of Fuguang Shares also binds the interests of employees to the company's market value to a certain extent, and it is not necessary to set up performance appraisal to link long-term interests, and the stocks donated are also linked to the company's market value or value.
"Of course, it is not excluded that some companies do implement employee stock ownership plans with certain interests, in which case investors will pay more attention to whether the company can afford to dilute the cost, how long it takes to bind employees, how to evaluate, and whether there will be better performance in the future." Wu Siying said.