The essence of "performance shares" is a gift relationship. As long as it conforms to the legal provisions of the gift and the provisions of the company law, "performance shares" can be protected by law.
According to Article 35 of the Company Law of People's Republic of China (PRC):
Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to pay dividends according to the proportion of capital contribution or not to subscribe for capital contribution in priority.
Article 3, paragraph 2, provides that:
Shareholders of a limited liability company are liable to the company to the extent of their subscribed capital contribution, and shareholders of a joint stock limited company are liable to the company to the extent of their subscribed shares.
Extended data:
Common ways to obtain performance shares:
1, stock right donation
After the establishment of the company, the shareholders directly donate part or part of the shares to others, and the donee becomes a "dry share" shareholder.
2, equity incentive (free or low-cost transfer of part of the equity)
In some high-tech, management or other enterprises, in order to retain talents, major shareholders transfer some shares to the motivated object free of charge or at preferential prices.
The object of motivation is often the technical, management talents or other core personnel who have made great contributions to the enterprise, so that after equity incentive, they are not only in a labor relationship with the company, but also expected to get profit dividends like the boss, which is more attractive.
However, the rights of performance shares obtained by equity incentive will be limited to some extent, such as the transfer of equity, the achievement reaching a certain standard, the working years and so on.