On June 21, Gree Electric (000651) opened sharply lower. As of press time, the lowest was 51.01 yuan, a drop of more than 4%.
On the evening of June 20th, Gree Electric presented a draft of the employee stock ownership plan. The capital scale of Gree Electric’s employee stock ownership plan does not exceed 3 billion yuan, and the scale of stocks does not exceed 108.4 million shares. The total number of employees who intend to participate in this employee stock ownership plan does not exceed 12,000, including a total of 8 company directors (excluding independent directors), supervisors, and senior executives, as well as middle-level employees who have an important role in the company’s overall performance and medium and long-term development Cadres and core employees.
Among them, Gree Electric’s chairman and president subscribed for 30 million shares, the other six directors or vice presidents subscribed for 600,000 shares, and employee supervisor Wang Fawen subscribed for 80,000 shares. The remaining shares are the company’s middle-level cadres and core employees. The Gree Electric Employee Stock Ownership Plan employees purchase shares at a price of 27.68 yuan per share, which is equivalent to 50% of the average price of the shares repurchased by Gree Electric. Among them, Dong Mingzhu intends to invest 830 million yuan to subscribe for 30 million shares, accounting for 27.68% of the plan.
The announcement shows: This Gree Electric Employee Stock Ownership Plan will vest the corresponding rights and interests to the holders of the Employee Stock Ownership Plan in two phases, and the proportion of each phase that can be vested The maximum is 50%. In the first vesting period, the net profit in 2021 will increase by no less than 10% compared to 2020, and the cash dividend per share for the year shall not be less than 2 yuan or the total cash dividend shall not be less than 50% of the net profit for the year. In the second vesting period, the net profit in 2022 will increase by no less than 20% compared with 2020, and the cash dividend per share for the year shall not be less than 2 yuan or the total cash dividend shall not be less than 50% of the net profit for the year.
However, after the plan came out, some Gree Electric investors had a relatively large rebound in this plan, believing that the exercise and incentive conditions for the employee stock ownership plan were too loose. In 2020, due to the new crown epidemic, Gree Electric’s performance base for that year was very low, and it was too loose to set the incentive conditions for employee shareholding based on 2020 performance. In addition, Gree Electric’s share price has not seen a big increase in more than two years. At this time, the employee shareholding plan stock price can be risk-free arbitrage at a 50% exercise. Some investors also believe that Dong Mingzhu’s personal shareholding is as high as 30 million shares, which is too high in the employee shareholding plan.
From the perspective of Gree Electric’s stock price trend, Gree investors have a low degree of recognition of this employee’s shareholding.
On April 15 this year, Gree Electric announced that it plans to launch an employee stock ownership plan.The total number of stocks that the employee stock ownership plan intends to hold does not exceed 3% of the company’s total equity, and the total number of stocks corresponding to the equity interests of a single employee does not exceed 1% of the company’s total equity. Gree Electric stated that the source of the stocks of this employee stock ownership plan is the accumulated repurchased shares in the company’s repurchase special account and the shares obtained in a manner permitted by laws and regulations such as secondary market purchases.
In 2020, Gree Electric launched two equity repurchase plans. Among them, 1.80% of the shares were repurchased in the first phase, and 1.68% of the shares were repurchased in the second phase, for a total of 3.48%.
On May 26 this year, Gree Electric once again offered a repurchase plan of no more than RMB 15 billion. Gree Electric stated that the repurchase is used to implement the company’s employee stock ownership plan or equity incentives, in order to further improve the company’s governance structure, build a long-term incentive and restraint mechanism for the management team’s shareholding, to ensure the realization of the company’s long-term business goals, and to promote all The interests of shareholders are aligned and revenue is shared, which enhances the overall value of the company.