After four years of Vanke's second-Push equity incentive plan

Vanke A (000002) released today the draft of the 2010 A-Share options incentive plan, which is intended to grant 110 million share options to 851 participants, accounting for about 1% of the current total equity, and an incentive for 3.94% of the total number of employees.　　Vanke's proposed stock options, valid for 4 years, the right price in accordance with the draft incentive plan released the first 1 trading days of Vanke A shares close and the first 30 trading day of Vanke A shares of the average closing price is determined, to 8.89 yuan. After a lapse of four years, Vanke launched the equity incentive plan again.　　Analysts pointed out that, from Vanke's stock options Incentive Plan of the right to the conditions, the performance evaluation index set more stringent than the previous restrictive stock plan, given the future market volatility and risk, Vanke's management team to get a successful reward is not easy. The assessment index is higher than the previous according to the announcement, Vanke's stock option Incentive plan is valid for 4 years, will take a grant, divided into three of the right way. That is, from the date of the grant, after a one-year waiting period, 40%, 30%, and 30% of the options in the subsequent three-right period will have the right to a viable right in the first, second and third power periods, subject to performance conditions.　　If the current period does not meet the performance conditions, the corresponding part of the options will be immediately void, by the company free of charge to withdraw and unified cancellation. Vanke was the first to launch a three-year restrictive stock Incentive program in 2006. Since the A-share market experienced a huge adjustment after 2007 years, the real estate market also entered the adjustment period in 2008.　　Influenced by this, Vanke's 2007-year incentive plan was abandoned due to the failure to meet its share price, and the 2008 incentive plan ended in failure to achieve performance targets, and Vanke's 2006-2008-year three-year incentive plan was actually only implemented for a year. Vanke again launched the incentive plan. Since the use of stock options, its value is entirely determined by the future price, shareholders and the interests of the incentive object is self-evident. In the setting of performance index, Vanke's option plan is stricter than the previous 2006-2008 years ' incentive scheme. The basic right condition of Vanke This option plan is as follows: first, the annual return on net assets which is required to be fully diluted in the three-right period is not less than 14%, 14.5% and 15%, and the 2006-2008 restricted stock plan is not less than 12%.　　Second, compared to the base year, the net profit growth rate of the subsequent tertiary year is not less than 20%, 45% and 75%, which is equivalent to a compound growth rate of 20% per annum, much higher than the previous net profit growth rate of no less than 15%.　　It should also be noted that the Vanke option scheme, when calculating Roe, selects the most rigorous method of fully diluted ROE, which is more difficult to achieve than the weighted average roe commonly used in the market. "Even compared with Vanke's own historical data, the incentive plan's target selection is also more stringent." "AnalystsSaid, "Vanke in the past 10 years, the average value of the ROE is 13.35%, and the current three-year Vanke Roe Evaluation Index 14%, 14.5% and 15%, in fact, is in the company's average historical level on the point, if according to the last year 15% ROE assessment indicators, in the past 10 years, Vanke actually only 2005 years and 2007 of the two years of performance can be achieved.　　"The person said, from the choice of performance indicators, Vanke's equity incentive scheme assessment is not" go through the Motions ", management team to get the right to the line is not easy.　　Highlighting endogenous growth requirements Another major feature of Vanke's options plan is that the company has clearly put forward the performance growth indicators will be adjusted according to the equity financing situation, such as the implementation of options within the validity of equity financing will increase the demand for net profit growth, which in a shares listed companies have launched an equity incentive plan is the first time. The above basic right condition is only the minimum requirement of Vanke option plan under the condition that the company does not carry out equity financing. The plan stipulates that if within the validity of the option Vanke has issued additional, if the additional purpose is to acquire assets, then the subsequent year should be excluded from the impact of the acquisition; If the financing is not the acquisition of assets, the calculation of the right conditions, should increase the subsequent annual net profit growth rate requirements. Vanke board Secretary Tan Huajie explained that the purpose of the adjustment is to highlight the demand for endogenous growth. Theoretically, the growth of net profit can only come from two aspects, one is to accumulate and improve the efficiency of operation, the return of net assets, and the other is to increase net assets through equity financing, so as to increase net profit scale. The former can be regarded as endogenous growth of the company, while the latter is an epitaxial growth. Vanke's current options scheme actually distinguishes between the two growth models, and it is clear that the growth of endogenous growth cannot be replaced by an extension.　　The requirement of the net profit growth rate in the basic right condition is actually the requirement of endogenous growth, if the equity financing is done, then the corresponding overall growth rate will be increased. Real estate is a capital-intensive industry, from the past few years, the rapid expansion of large real estate enterprises are often inseparable from the promotion of financing. Tan Huajie admits that Vanke's rapid growth in 2005-2007 is closely related to the strong support of the capital markets. Vanke successfully implemented equity financing in 2006 and 2007, providing the impetus for the company's epitaxial growth.　　Vanke's current scale has entered a new stage of development, needs from the scale speed to the quality benefit type growth transformation, but in recent years the industry regulation strength unceasingly enlarges, the enterprise's financing environment also is affected, therefore whether from the external environment, or the own development stage angle, anticipates in the future some time, Vanke will pay more attention to the intension type growth. Incentive mechanism to create greater value April 2010 and September, the country two times the introduction of real estate control policies, especially to curb the demand for investment housing, the intensity of the unprecedented in history, will have a significant impact on the market. How to view Vanke at this time launch periodRight incentive plan? In this respect, Tan Huajie said that the future regulation of the real estate industry will become a normal, the industry's cyclical adjustment is difficult to avoid, but because of this, enterprises need to establish a long-term incentive mechanism. He thinks, the stock option Incentive Plan is an important link of Vanke strategy Landing, the aim is to establish the benefit sharing and the restraint mechanism between the shareholder and the professional manager team, this goal will not change because of the market environment change. In the coming period, the industry does face many challenges. At this time, the introduction of options Incentive Plan, on the one hand, enhanced shareholder confidence in the company, on the other hand, also set a clear goal for the management team, to help management team in the face of market challenges to play a more active, to create greater value for shareholders. According to the rules, the listed company option plan also needs to obtain the Supervision Department's record no objection, and submits to the shareholder meeting to consider, after the shareholder general meeting approval, may formally implement.