A few days ago, BYD announced that it intends to launch an employee stock ownership plan, and the total number of participants does not exceed 12,000. In the equity incentive plan of Great Wall Motor, the GAC E-An mixed reform plan and the "ideas" or plans of many new car companies, employee shareholding or "equity incentives" are not uncommon.
However, it is rare that employees receive 0 yuan of equity transfer, according to BYD's announcement, the above-mentioned participants do not need to contribute capital, and can transfer the shares (6 million shares) that the company intends to repurchase at a price of 0 yuan per share, with a total of between 1.8 billion yuan and 1.85 billion yuan. This means that as long as the company's performance and other related goals are completed, employees can hold BYD's shares without spending a penny, calculated by 12,000 people corresponding to stocks worth 1.8 billion yuan to 1.85 billion yuan, which is about 150,000 yuan per capita.
As for the reasons, BYD said in the announcement that in order to further activate the company's technological innovation capabilities, maintain the competitive advantage of the industry, and promote the company's long-term sustainable development, the company intends to implement the repurchase of shares for the employee stock ownership plan, continue to improve the long-term incentive and constraint mechanism of mutual benefit and win-win results, effectively combine the interests of shareholders, the interests of the company and the core team and individual interests, and enhance the overall value of the company.
Of course, even if BYD does not mention this kind of "official language", we can guess that after all, the purpose of "equity incentive" is similar. So, how will BYD employees unlock their own "BYD Qin"?
Not spending a penny to get stocks Conditions are not much looser
According to the "2022 Employee Stock Ownership Plan (Draft)" disclosed by BYD, the participants of the employee stock ownership plan include the company's employee representative supervisors, senior management personnel, and middle-level management personnel and core backbone employees of BYD Group, with a total number of no more than 12,000 people.
Among them, a total of 14 employee representative supervisors, senior managers, etc. plan to allocate 553,300 shares, which is intended to account for 7% of the total share, and it can be seen that the proportion of high-level transfers is not large, but due to the rarity of high-level, it is certain that there is more than one BYD Qin. The objects of this employee shareholding cover the core employees of various positions such as technology, operation, marketing, and synthesis, covering a wide range of scales, and can be regarded as a "mainstay" for BYD.
But since such practices are called "equity incentives", they must be conditional, and BYD's conditions are actually not much looser.
According to the announcement, the duration of the employee stock ownership plan is 48 months, and the underlying stocks held are unlocked in three phases, with each unlocking ratio of 30%, 30% and 40% respectively. The performance appraisal is based on the three fiscal years from 2022 to 2024, of which the first unlocking period, the company's operating income should be based on 2021, to achieve a growth rate of not less than 30%; in the subsequent two unlocking periods, BYD's operating income should maintain sustained growth, and the growth rate of each period should be not less than 20%.
According to BYD's revenue of 216.142 billion yuan in 2021, BYD's employee shareholding is fully unlocked, which means that in 2024, the company's revenue will exceed 400 billion yuan, almost doubling. It is worth mentioning that if the target cannot be achieved, it will be recovered by BYD without cost, "If the company's performance appraisal indicators corresponding to a certain unlocking period are not achieved, the underlying stock rights and interests corresponding to the unlocking period shall not be unlocked, and the company will recover the shares of the corresponding company at a price of zero yuan and cancel it, or use it for the later employee stock ownership plan or equity incentive plan."
As for the target, people close to BYD are also more confident, and they told "Dao Ge Says Car" that the matter is man-made.
BYD is in its prime, but what about after that?
In recent years, the spring breeze of new energy vehicles has become warmer and warmer, as one of the earliest car companies in China to lay out new energy vehicles, BYD is even more mixed, and it is not too much to call it "in its prime". The goal of doubling revenue in 3 years is not easy for BYD employees to unlock all their shares. But unlocking the first tranche of equity may not be difficult.
In 2021, the operating income will be about 216.142 billion yuan, an increase of 38.02% year-on-year. That is to say, BYD must achieve operating income of no less than 280.985 billion yuan this year in order to complete the first unlock. According to BYD's current development trend, this goal may not be too difficult.
Official data show that in the first quarter of this year, BYD has sold about 286,300 new energy vehicles, an increase of 422.97% year-on-year, and the data shows that its growth rate is considerable, even faster than the sales growth rate of most of the new car-making forces with low base. According to bydir released by BYD for the first quarter of 2022, in the first quarter of this year, the company's net profit attributable to shareholders of listed companies is expected to be about 650 million yuan to 950 million yuan, an increase of 174% to 300% year-on-year.
Overall, the current development trend of BYD is gratifying. It is worth noting that at present, many institutions are optimistic about the prospects of BYD, and Cinda Securities Research Report predicts that BYD will achieve revenue of 3756, 4828 and 586 billion yuan in 2022-2024, an increase of 74%, 29% and 21% year-on-year, if this prediction comes true, then BYD employees "do not spend a penny" to take away a BYD Qin is not any pressure.
However, the changes in the automobile market are unpredictable, and the environment is also relatively tense due to the impact of the epidemic and the supply chain, can BYD really go all the way and grow significantly in revenue for three consecutive years?
"Equity incentives" of car companies have become a common practice
At present, the vast majority of well-known Internet technology companies in China have their own set of "equity incentive plans", and this method can also be regarded as one of the symbols of Internet technology companies, and from the trend of recent years, this landmark practice is spreading among the majority of automobile companies.
On May 25 last year, Great Wall Motor released the largest equity incentive plan in history: it intends to grant 397.101 million stock options to 8,784 incentive recipients and 43.184 million restricted shares to no more than 586 incentive recipients. It is understood that the total number of recipients of Great Wall Motor's equity incentive plans in 2020 and 2021 reached 10,669, accounting for 16.89% of the total number of employees of the company.
On the other hand, Geely Automobile's "Common Prosperity Plan Action Plan" full income growth plan also unceremoniously included equity incentives; GAC Aean, which intends to be mixed into an independent listing, also raised a total of 2.566 billion yuan through capital increase, sending about 4.55% of the "oil price" shares to the GAC Aean employee equity incentive platform and the GAC Research Institute Science and Technology Personnel Shareholding Platform, about 800 people; the newly entered Xiaomi also launched an equity incentive plan, announcing at some time ago to approve the adoption of Xiaomi EV's equity incentive plan, which plans to authorize a maximum of 1 billion shares, representing 10% of the total number of issued shares of Xiaomi EV.
Up to now, it seems that it is difficult to find "no equity incentives" for auto companies, and the reasons are explained in a stylized way, such as: stimulating employee vitality, maintaining competitive advantage, promoting long-term sustainable development, and binding employees and company interests.
So, can the frequent and diverse equity incentive plans of various car companies really make their own invincible position?