Implementation Of Climate Change &Nbsp; Gem Companies Continue To Abolish Equity Incentive.

After Zhong Neng electric, the stock incentive plan of Shuang Lin shares has also been suspended.

Shuang Lin

According to the announcement, after studying, the board of directors of Shuang Lin shares decided to withdraw the company's restricted stock equity incentive plan, and promised not to consider and disclose the equity incentive plan within 6 months from the date of the announcement of the resolution.

In November 26th last year, the stock incentive bill issued by Shuang Lin shares was awarded 2 million 180 thousand restricted shares to the incentive target, 2.33% of the total share capital. The first time, 32 shares were awarded to 1 million 980 thousand directors, executives, general managers of the molecular companies, core technicians and middle managers, and 200 thousand shares were reserved. When the incentive objects reached the prescribed conditions, they were asked to unlock the circulation in 4 phases.

The price of restricted stock is 20 yuan / share, according to 50% of the average price of 20 days before the pricing basis.

For the reasons for the sudden termination, Shuang Lin explained that since the announcement of the bill, financial institutions increased the deposit reserve ratio five times in December 20, 2010, January 20, 2011, February 24, 2011, March 25, 2011 and April 21, 2011 respectively.

These macro-control measures make it difficult for the incentive object to raise funds to buy restricted stock.

The company said that it would combine the actual situation and further improve the requirements in accordance with the relevant provisions of the time limit, looking for appropriate opportunities to plan incentive plans separately.

The first case of gem's termination of equity incentive is Zhong Neng electric.

In April 26th, the board of directors adopted a motion to withdraw the equity incentive plan.

According to the draft issued in December last year, Zhong Neng intends to concurrently award 2 million 150 thousand share options to 51 objects, accounting for 2.79% of the total capital stock. The draft has been reported to the securities and Futures Commission and has not yet obtained a letter of no objection from the SFC.

The main reason for the abolition of stock options in China is that since 2011, the company has introduced and introduced talents continuously. At the same time, if integration and merger are implemented, the core business backbone of the new enterprises will also become the object of encouragement.

Therefore, in the present or near future, the scope of incentive has changed or will soon change. This equity incentive coverage can no longer meet the needs of talent motivation.

Although there are reasons for this, some market participants believe that an important factor that can not be ignored is that with the decline of the gem index, many companies' stock option exercise price and the market price have "hang upside down"; the difference between the restricted stock's grant price and the market price has been shrinking, and the arbitrage space of the incentive object has been reduced.

In the weak market, the company abolished the equity incentive, obviously focusing on the interests of the incentive object, so as to ensure the incentive plan to play its due effect.

The share price of Shuang Lin shares yesterday was 32.61 yuan, lower than the 20 day average price of restricted stock pricing benchmark (40 yuan) about 18.5%, and the latest stock price of China Electric Co., Ltd. was 29.08 yuan, which was 22% above the 37.49 yuan of exercise price.