Geely Auto Group’s board of directors approved a share award plan for a total of up to 350 million shares and granted about 167 million shares to 10,884 incentive recipients under the plan, or about 3.7 billion yuan ($573.003 million) based on the latest market value, the company said in an announcement at the Hong Kong Stock Exchange on Monday.
The announcement shows that the purpose of this plan is to encourage these incentive recipients to continue contributing to the long-term growth of the company, enhancing the value of the firm and its shares to the benefit of shareholders, and to attract and retain quality employees who will contribute to the growth and development of Geely.
The maximum number of shares that may be granted under the share award plan is 350 million, representing approximately 3.56% of the total amount of shares in issue.
According to the announcement, 167 million grant shares will be issued under the award plan and the incentive recipients will be required to pay the par value of the grant shares.
The issue price of the newly granted shares is HK$0.02 ($0.00257) per share, and the total nominal value of the 167 million granted shares is HK$3.34 million ($429,197). On August 30, 2021, Geely Auto’s Hong Kong shares closed at HK$26.90 apiece. Therefore, the market value of the 167 million granted shares is approximately HK$4.49 billion.
The stock market value of 3.73 billion yuan will be distributed to 10,884 employees, with an average of 342,700 yuan ($53,026) per employee.
This share award plan will be subject to a series of vesting conditions, which must be met before the incentive recipient can receive shares in four tranches of 25% each year from August 30, 2022 to August 29, 2025.
Founded in 1996, Geely Auto Group is headquartered in south-east China’s Zhejiang Province. On June 10 this year, the Chinese government released a guide on supporting Zhejiang’s high-quality development to build a model zone of “common prosperity,” a term coined by the CCP, proposing that Zhejiang Province will make obvious and substantial progress in promoting development by 2025, and make greater achievements in Zhejiang by 2035 to fundamentally realize common prosperity.
In addition to the issuance of this stock, on July 3, Geely officially released their own plan to achieve common prosperity, including a series of measures such as income growth, family health insurance and career promotion for all employees.
Li Shufu, Chairman of Zhejiang Geely Holding Group, said: “Our purpose is to further enhance the company’s competitiveness and further improve the professional dignity of all employees. We hope to drive the sustainable development of the whole industry and realize the common prosperity in the industry.”