How can non-state-owned listed companies make better use of equity incentive plans as a means of encouragement? Yang Liang, Board Secretary, Livzon Pharmaceutical Group Inc, shares his experience on the planning and implementation in this area.

Currently, listed companies in the Mainland generally implement employee incentives in two ways – equity incentives and employee stock ownership plans. Equity incentives refer to long-term incentives for directors, senior managers and other employees of listed companies based on the company’s stocks. The main methods for offering equity incentives include restricted stocks and stock options (see Glossary for an explanation of the terms used in this article). 

An employee stock ownership plan refers to a system arrangement whereby a listed company legally allows employees to obtain the company’s stock and hold it for a long period of time according to the wishes of the employees. The rights and interests of the stock are allocated to employees in accordance with the plan design. Currently, the stock ownership plans available in the market mainly include private placements, financing, award fund, repurchase and stockholder grants. 

Different incentive methods have their own advantages and disadvantages. For listed companies, different incentive plans need to be adopted based on actual conditions. Generally speaking, equity incentive plans balance incentives and constraints well, while employee stock ownership plans focus on benefit-sharing. In the design of incentive schemes, the key elements can generally be summarised as relating to ‘four areas’ (person, quantity, price and timing) and ‘two sources’ (stock source and capital source).

Creating a multilevel equity incentive system

Following its goal to become a leader in the pharmaceutical industry, Livzon Pharmaceutical Group Inc (Livzon) has been actively implementing a variety of equity incentive measures since 2014. Depending on the incentive purpose and scope level, it has adopted various forms of equity incentives including employee stock ownership plans, restricted stocks, stock options and subsidiary-level incentives, which provide strong support for the sustainable growth of the company’s business. 

At the base of the pyramid, Livzon has formulated standardised equity incentives, such as stock options and restricted stocks, for executive-level employees and above and core personnel within the group. Middle-level management and above, together with core personnel of Livzon’s business units or subsidiaries, participate in the investment or transfer of equity of these business units or subsidiaries. At the top of the pyramid, Livzon adopted a ‘business partner share ownership scheme’ to cover a small number of core personnel who play a key role in the future strategy and business of the company.

In 2014, against the background of management changes at Livzon and the successful conversion of B shares into H shares after listing on the main board of the Stock Exchange of Hong Kong, Livzon initiated planning and then implemented its first equity incentive plan. This is to enhance the morale and governance standards of the team. Some 10 million shares were issued to 483 middle and senior management, and core technical personnel. In 2018, Livzon officially launched a stock option plan with a total of 1,045 participants and a total of 15 million shares, accounting for 2.71% of the company’s total shares.  

In 2020, on the basis of the existing wide coverage of the equity incentives, Livzon launched a medium to long-term business partner share ownership scheme for its core management, which is based on the modal of excess profit assessment and reward fund. From 2020 to 2029, Livzon will implement multiple, independent phases of its share ownership schemes. 

Incentive mechanisms are crucial to the company’s long-term development. For the company, on the one hand, the distribution of performance stocks can reduce the cost of cash expenditures, which is conducive to stabilising the stock price. On the other hand, the partner incentive mechanism can attract more domestic and foreign talent to join the company.

Equity incentives create value for enterprises

According to Livzon’s experience in implementing multilevel equity incentives, from planning and approval to market value management, listed companies need to ensure smooth communication with key decision-makers, such as managers and major shareholders, and with internal supporting departments and external service organisations. 

Equity ownership incentives should essentially serve corporate strategy and business development. The choice of incentive methods should be based on the company’s performance, and should be able to bring stability and attract talent. A stock incentive plan can be designed to be effective, exercisable and sustainable from the perspective of time, price, quantity, people and funding sources.

  1. In terms of effectiveness, the incentive plan must cater to the interests of shareholders and guide managers to bear shareholders’ concerns and interests in mind when taking decisions. The plan should enable managers to generate proper expectations and achieve the desired goals.
  2. In terms of operability, consider whether the plan is feasible – in particular whether participants can reasonably take on the risks involved, whether the incentive cost is reasonable, whether the funds can be properly sourced and whether the equity pricing method is reasonable and clear enough.
  3. In terms of sustainability, it is important to avoid equity immobilisation. When a listed company launches an equity incentive plan, it can set up reserved equity and the reserved proportion usually does not exceed 20% of the amount of equity to be granted under the equity incentive plan.

In determining individual performance indicators, performance evaluation tools such as key performance indicators or the balanced scorecard tool, can be introduced. Listed companies might wish to be bold in setting performance indicators and long-term goals – after all, equity incentives have a future orientation.

Today, equity incentives have become one of the effective means of market value management for listed companies. Based on Wind data, China International Capital Corporation established an index with the sample base of companies that were implementing or had implemented equity incentives from 2010 to 2020. The data showed that the A share companies implementing equity incentives significantly outperformed the main indexes. In fact, aligning the interests of managers and listed companies can increase investor confidence. More and more listed companies attach importance to the establishment of long-term incentive mechanisms and the use of other market value management tools. They can increase their rate of return on equity incentives.

Since its listing, Livzon has attached great importance to corporate social responsibility and continues to improve its ability to give a return to investors. It has experienced a sharp increase in its market value from 2011 to 2020. However, we must also be clearly aware that the existing equity incentive mechanisms still have their own limitations, and the improvement of corporate governance is a long-term task. In the future, Livzon hopes to work with more listed companies to explore the optimal incentive mechanisms and possibilities for improving corporate governance.

Yang Liang, Board Secretary

Livzon Pharmaceutical Group Inc

SIDEBAR: Glossary

Restricted stocks. Restricted stocks refers to company shares acquired in accordance with the conditions specified in an equity incentive plan, whose transfer and some other rights are restricted. 

Stock options. Stock options refers to rights granted by a listed company to participants to purchase a certain number of company shares under predetermined conditions within a certain period of time. 

Key performance indicators (KPIs). KPIs are target-oriented quantitative management indicators that measure process performance by setting, sampling, calculating, assessing and analysing the key parameters of inputs and outputs in internal processes. They are also a tool used to divide strategic business goals into exercisable work targets, constituting the basis of business performance management. 

Balanced scorecard (BSC). As one of the common performance evaluation methods, BSC is a new performance management system that evaluates the implementation of business strategies by exercisable indicators and targets from four different perspectives: finance, customers, internal operation, and learning and growth. 

民营上市司股权激励方案

民营上市公司如何灵活运用现有股权激励工具?丽珠医药集团股份有限公司董事会秘书杨亮先生就股权激励方案的设计与实施分享了经验。


目前,国内上市公司实施员工激励主要有两种方式:股权激励和员工持股计划。股权激励是指上市公司以本公司股票为标的,对其董事、高级管理人员及其他员工进行的长期性激励,股权激励主要工具有限制性股票和股票期权(有关本文中使用的术语的解释,请参阅“词汇表”)。

员工持股计划则是指上市公司根据员工意愿,通过合法方式使员工获得本公司股票并长期持有,股份权益按约定分配给员工的制度安排。目前市场上的持股计划主要有定向增发型、融资买入型、奖励基金买入型、公司回购型与股东赠与型。

不同激励方式各有其利弊,对于上市公司来说,不同发展阶段需根据实际情况采用适宜的激励方案。总体来讲,股权激励计划偏向激励股方向,注重激励与约束的平衡;员工持股计划则偏投资股方向,侧重利益共享机制。在激励方案设计上,一般可将关键要素归纳为四定(定人、定量、定价、定时)和二来源(股票来源和资金来源)。

打造多层次股权激励体系

秉持做医药行业领先者的愿景,丽珠医药集团股份有限公司(丽珠集团)自2014年以来积极实践多种股权激励措施,根据激励目的与范围层级情况的不同,分别采用员工持股计划、限制性股票、股票期权、子公司层面激励等多种形式的股权激励,为公司业务的可持续增长提供了支持。

在金字塔底座,丽珠集团针对全集团范围内主管级以上及核心骨干人员制定了股票期权、限制性股票等规范股权激励;针对事业部或子公司中层以上管理人员及核心骨干,参与事业部或子公司股权跟投或转让;在金字塔顶端,通过“事业合伙人持股计划”覆盖少数对公司未来战略及业务起关键决定作用的骨干人员。

2014年,恰逢丽珠集团管理层调整及成功实现B股转板香港H股主板上市,为促进管理层的凝心聚力及公司治理水平的提升,公司启动筹划并实施了上市后的首次股权激励,向483位中高层管理人员及核心技术人员定增发行1000万股。 2018年,丽珠集团正式推出股票期权计划,激励对象共计1045人合计1500万股,占公司股本2.71%。

2020年,在既有的广覆盖的股权激励基础上,丽珠集团针对核心管理层推出中长期事业合伙人计划。本次中长期事业合伙人计划采用超额利润考核奖励基金方式,在2020年至2029年十年间,丽珠集团将实施多期各自独立存续的持股计划。

激励机制对公司的长远发展至关重要。对于公司而言,一方面,业绩 股票的分配可减少现金支出成本,利于股价稳定,另一方面,合伙人激励机制可吸引更多国内外优秀人才加入企业。

股权激励为企业缔造财富价值

根据丽珠集团多层次股权激励实施经验,从方案筹划到审议决策再到市值管理各阶段,上市公司需做好多维度的沟通工作,不论是与管理层、大股东等关键决策者的沟通,还是与内部支持部门、外部服务机构的沟通。

激励本质上是为公司战略与业务发展服务,激励方式选择上要以公司业绩导向为主,兼顾稳定和吸引人才。在股权激励方案设计原则上,可以从时、价、量、人、资金来源等角度出发,让方案具备有效性、可操作性与可持续性。

  1. 有效性方面,真实的激励导向要符合股东利益,引导经理人向股东关注的方向努力,使经理人产生合适的期望及达成期望的效价。
  2. 可操作性方面,考虑是否符合被激励人合理适度承受风险的原则,激励成本是否合理,是否能够妥善解决资金来源,股权定价方法是否合理清晰。
  3. 可持续性方面,要避免股权固化导致激励性股权枯竭。上市公司在推出股权激励计划时,可设置预留权益,预留比例通常不超过股权激励计划拟授予权益数量的20%。

个人业绩指标确定上,可引入关键绩效指标或平衡计分卡等绩效考核工具,突出股权激励个人考核的灵活性与差异化。其实不管是股权激励的选择还是方案的设计,上市公司在业绩条件设定上不妨大胆一些,以长远视角设定目标,毕竟股权激励是面向未来的激励体系。

时至今日,股权激励已成为上市公司市值管理的有效手段之一,中金基于万得数据将2010年至2020年正在实施或曾经实施股权激励的公司作为样本空间建立指数,数据显示,A股实施股权激励的上市公司大幅跑赢主要指数。实际上,当管理者与上市公司利益趋同,同样可以增加投资者信心。当越来越多的上市公司重视长效激励机制建设与其他市值管理工具运用,也能提高股权激励收益率,发挥正向激励作用。

上市以来,丽珠集团高度重视公司社会责任,持续提升回报投资者的能力,2011年至2020市值规模大幅攀升。不过,我们也要清楚意识到,现有股权激励机制仍然有各自的局限,公司治理提升亦是一个任道而重远的长期课题。未来,丽珠集团希望与更多上市公司携手,不断探索最优激励机制与公司治理提升的诸多可能。

杨亮先生

丽珠医药集团股份有限公司 董事会秘书