1. Incentive mechanism: As an incentive means, performance shares are usually used to reward a company's important employees, management, technical backbone or partners, so that they can share part of the company's profits, thus improving the enthusiasm and loyalty of employees and promoting the long-term stable development of the company.
2. Retain talents: For start-ups or fast-growing enterprises, performance stocks can attract and retain core talents, make them feel that they are part of the company's growth and enhance their sense of belonging.
3. Cost saving: Compared with cash rewards, performance stocks do not need the company to pay a large amount of cash immediately, but compensate employees through future dividends, which can alleviate the cash flow pressure of enterprises to some extent.
4. Optimization of ownership structure: Through the arrangement of performance shares, the company can rationally adjust the ownership structure, optimize the allocation of resources, attract more influential personnel or resources to join, and help enterprises broaden their business channels or enhance their market competitiveness.
5. Compliance and legal issues: In reality, the issuance of performance shares needs to comply with relevant laws and regulations, especially in listed companies, the processing of performance shares is usually converted into options, restricted shares and other forms to ensure the legitimacy and transparency of the operation.