The partner system makes the boss happy to worry about the boss

How far is it from working for a company to working for yourself? The system of partners with employee stock ownership as the core may be a bridge between employees and the company. Vanke real estate "leader" Vanke introduced partner system, so that this concept is not too fresh again popular. In the opinion of Yu Liang, president of Vanke, the mechanism of the business partnership is important because it is both a management mechanism and a sharing mechanism and is even a development mechanism. Under the partnership mechanism, the benefit sharing between investors and employees is well resolved.

"In general, technology-based enterprises that rely more on key employees adopt more and their performance is relatively good." However, Chen Fa, a lawyer with Guantao Law Firm, told Southern Metropolis Daily when he said that equity incentive is not "once and for all," and from a corporate management point of view , The implementation process also need to pay attention to various levels of problems to ensure cohesion of workers at the same time, enhance the competitiveness of the company.

Work as a shareholder

Employees holding shares, the company managers and shareholders can closely integrated interests, as an effective incentive. This also means that employees continue to overweight their own investment in the company, and may get a higher rate of return. To this end, many Vanke senior staff enthusiasm for the cause of partner system, the collective bonuses of more than a thousand employees and the introduction of financing leverage to do the source of funding Yingan partnership has repeatedly overweight, currently top Vanke second largest shareholder . Landsea Green Real Estate also announced in July it intends to adopt a restricted share incentive scheme to purchase or subscribe for up to 10% of the company's shares.

According to the operation of the business lawyers introduced some of the current innovations, high-tech enterprise equity incentives more, another second-hand housing market also requires employees to share examples. Chen said that the biggest benefit of this system is keeping people well-off, and by turning employees into shareholders and holding shareholders, it is possible to handle the business from the shareholders' interests of the company.

To this end, many companies began to attempt to launch employee stock ownership plan. Cases have been shown that equity incentives for the company to retain talent, restraint management talent, attract talent pooling. Taking Huayuan Real Estate Equity Incentive System as an example, the stock option is taken as an incentive tool, and the incentive objects are managers and ordinary employees with a total incentive amount of 30 million shares. The exercise period stipulates that the execution of the employee warrants is exercisable after one year from the grant of the Hong Kong Stock Exchange Listing Rules and may be sold after four years. The basis for the allocation is based on the length of service and the distribution of duties. The average employee turnover rate in the two years prior to the implementation of equity incentive was 15.7%. The average employee turnover rate in the two years after implementation fell to 12.1%.

Equity incentive dispute over equity

However, Vanke "career partners" system has led to "door barbarians" invasion and stake diversification concerns. In fact, from a number of companies to implement equity incentives, there are many cases of bitter fruit. Judging from the international and domestic experiences, most of the headaches of equity project implementers include the following: the substantial increase in the income of senior management, but no improvement in corporate efficiency or even a sharp decline; the resignation of cash dividends and equity incentive into equity disputes.

According to preliminary statistics, since May, more than 40 listed companies announced the announcement of the equity consolation, touching more than 600 million shares of listed companies. However, according to the historical data provided by a specialized agency, from the beginning of 2006 to March 2008, 90 listed companies with equity incentive plans announced in Shanghai and Shenzhen. During the period, most of the top executives got higher incomes, but the profitability of their enterprises dropped significantly.

"If the equity incentive stock less, may not play an incentive role; but more will lead to decentralized equity, or weaken the controlling shareholder of the company." Chen Tao, lawyer at Guantao told reporters Southern.

In addition, some executives of listed companies will be the implementation of equity incentive behavior as "handcuffed", which reflects the executives are both motivated and constrained and performance pressures. Take Vanke as an example, the conditions for the Company to withdraw the incentive fund meet the dual requirements of the company's annual net profit (NP) growth rate of more than 15% and the company's fully diluted annual ROE of over 12%.

"The implementation of equity incentives requires a rigorous system of corporate governance and performance appraisal system to do the support, what kind of business for what kind of equity incentive model ever-changing." A listed company executives told reporters to the South, so to do before equity incentives Corporate governance structure and governance system is sound to do scientific appraisal.

Written: Southern Reporter Chen Linlin