First, the definition of equity incentives of listed companies
Article 2 of the Measures for the Administration of Equity Incentives of Listed Companies (Trial) stipulates that equity incentives mentioned in these Measures refer to the long-term incentives given by listed companies to their directors, supervisors, senior managers and other employees with their own shares as the target. The provisions of these Measures shall apply to listed companies that implement equity incentive plans through restricted stocks, stock options and other means permitted by laws and administrative regulations.
Generally speaking, the definition of equity incentive of listed companies should be: long-term incentives for directors, supervisors, senior managers and other employees by listed companies with their own shares as the target.
It can be seen from this clause that listed companies need three contents to implement equity incentive. The first content, what is the object of encouragement? Obviously, the object of equity incentive should be the shares of listed companies; The second content, who is the object of encouragement? Obviously the directors, supervisors, senior managers and other employees of the company; The third content, what are the characteristics of the incentive period? This is a long-term incentive. This is the definition of equity incentive of listed companies in national laws.
However, equity incentive is not only the right of listed companies. Facts have proved that the demand of non-listed companies for equity incentives is more urgent. However, so far, there is no law that clearly stipulates the equity incentive of unlisted companies.
Second, the definition of equity incentive of non-listed companies in existing books.
Since only listed companies can become stocks, non-listed companies cannot become stocks, but only shares or equity, legally speaking, the legal definition of equity incentive for non-listed companies cannot refer to the legal definition of listed companies. At present, there is no law to clearly stipulate the equity incentive of unlisted companies.
At present, most books explain the definition of equity incentive in this way: equity incentive is an incentive way to give business operators certain economic rights by obtaining company equity, so that they can participate in enterprise decision-making, share profits and take risks as shareholders, thus serving the long-term development of the company diligently and responsibly.
In fact, we think the definition of this kind of equity incentive is inaccurate. On the surface, it seems that shareholders give employees equity, and employees become shareholders, and then participate in decision-making, enjoy dividends, and take risks, thus serving the company for a long time. But this only describes the current situation of equity incentive, and does not clarify the essence of equity incentive. So this definition is not accurate.
Three. We believe that the definition of equity incentive is:
We believe that, first of all, equity incentives are targeted. To put it bluntly, equity incentive should be a transaction, an exchange of rights and obligations. I believe that no boss will be willing to give his equity to others at will. Anyone who gives others equity has a certain purpose, is the result of a transaction and is a choice to balance rights and obligations. Therefore, the definition of equity incentive must first be on the target. Secondly, we believe that the definition of equity incentive should clarify the object of transaction, the rights and obligations of both parties, that is, non-company shareholders. Furthermore, we believe that the definition of equity incentive should clarify the purpose of this transaction, that is, to hope that employees will work hard for the company for a long time.
Therefore, referring to the definition of equity incentive of listed companies, the shares of non-listed companies cannot become shares, so we can collectively refer to the shares of listed companies and non-listed companies as equity. Then, the definition of equity incentive covering listed companies and non-listed companies should be: long-term incentives for directors, supervisors, senior managers and other employees by companies or enterprises with their own equity as the target.
The content of this paper is provided by the equity incentive network (equity incentive lawyer network), which is an authoritative legal service website for equity incentive in China, with a strong team of lawyers, a professional legal service website for equity incentive founded by Ma, a senior partner of Beijing Dajia Law Firm, and a few professional law firms in China who are proficient in the design of equity incentive legal services, and are familiar with the legal provisions design of equity incentive tools such as medium-term shares, equity options, performance shares, virtual shares, management shares, employee shares and book value appreciation. Welcome to contact us for legal consultation, legal training, legal scheme design, legal review of existing equity incentives and dispute resolution of equity incentives!