What are the modes of equity incentive?

There are stock options, employee stock ownership plans, MBO, stock appreciation rights, performance stocks, restricted stocks and so on. The stock appreciation rights mentioned above is the right that the listed company grants the incentive object the right to obtain a specified amount of stock price increase and gain income under certain period and conditions.

legal ground

Article 3 of the Trial Measures for the Implementation of Equity Incentives by State-controlled Listed Companies (Overseas)

The term "equity incentives" as mentioned in these Measures mainly refers to equity incentives such as stock options and stock appreciation rights.

Stock option refers to the right granted by a listed company to the incentive object to buy a certain number of shares of the company at a predetermined price and conditions in the future. In principle, stock options are applicable to overseas registered and state-controlled overseas listed companies. Equity incentive objects have the right to exercise this right and also have the right to give up this right. Stock options may not be transferred and used for guarantee, debt repayment, etc.

Stock appreciation rights refers to the right that the listed company grants the incentive object to obtain the benefits brought by the rising stock price in a certain period and under certain conditions. Stock appreciation rights is mainly applicable to companies that issue overseas listed foreign shares. The object of equity incentive does not own the ownership of these stocks, nor does it have the voting rights and rights issue of shareholders. Stock appreciation rights cannot be transferred and used for guarantee, debt repayment, etc.