What is a business partner, what are the advantages and disadvantages compared to equity incentives?

Equity incentives, as if the boss married to the employee

Introduction: let the core staff to become shareholders of the company, is a lot of small and medium-sized enterprises commonly used to retain people, equity risk, the operation needs to be careful!

Small and medium-sized enterprises to do equity incentives must pay attention to four important principles:

One, effective than makes sense: there is no one model is the best, as long as it is suitable, effective is the best.

Two, step-by-step implementation is more important than a single deepening: a model is the most suitable at a certain stage, but may not be optimal at the next stage.

Three, combined **** win more important than the sole win self-interest: equity incentives is never the pursuit of a sole win, counting not only *** with the distribution of benefits, but also how to do *** with the interests.

Four, the future is more important than the present: with the future of the interests of the incentive now, with *** with the interests of the incentive team.

At the same time, in terms of design, there is also a need to have eight requirements:

I. Fairness: participation in the object, the allocation of shares.

Two, ****winning: reasonable pricing, return attraction.

Three, incentive: creativity, contribution of super value.

IV. Flexibility: exit mechanism, distribution flexibility.

V. Security: risk protection, basic return.

Sixth, binding: on-the-job equity, trading rules.

VII. Sustainability: development orientation, sustained value.

Eight, legitimacy: agreement agreement, legal operation

Equity focuses on the layout, in fact, the incentive is relatively low. But in the operation should also guard against these five major risks: 1, sitting on the fence; 2, out of control risk; 3, integrity risk; 4, financial risk; 5, legal risk!

Today's special presentation on the four common ways for employees to become real shares of the company, for friends to refer to:

One, the gift of shares:

Operation:

1, usually conditional gift of real shares;

2, the process: the signing of a restrictive equity transfer agreement to the Trade and Industry Bureau to change the register of shareholders;

3, the object: Executives, core talent, key old employees;

4, the number: the highest gift is generally no more than 20%, the total number of gifts controlled within 33.3%

Advantages: 1, does not require employees to make contributions; 2, do not need to do an asset evaluation; 3, the implementation of a high degree of obstacle-free; 4, urging the owner of the business from the public and private personalized, family-owned businesses to corporatization;

< p>Defects: 1, the increase in shareholders, financial to internal transparency; 2, the grantor authority is subject to certain limitations; 3, the grantor's earnings are reduced accordingly;

Design Points: in the restrictive conditions, it must be clearly written: such as the grantee's initiative to leave the job, the disposal of the situation of disciplinary dismissal. Is the equity transferable? How does the grantor recover?

Second, direct share purchase type:

1, the employee contribution to subscribe to the company's shares;

2, the process: assessment of the company's assets, to determine the internal share price, the signing of the subscription agreement, fill in the receipt, change the register of shareholders;

4, the number of: the maximum of not more than 90% to be considered to be set aside;

Advantages: 1, the employee's contribution to the participation of the high degree of 2, grantor no loss of equity;

Advantages: 1, employees contribute to a high degree of participation; 2. , the grantor has no loss of equity;

Deficiencies: 1, there is a possibility of increasing shareholder disputes; 2, the expenses of asset valuation, valuation amount of the disagreement; 3, intangible asset assessment difficulty and agree with the same; 4, financial, tax and other issues to be disposed of in place;

Points: the choice of shareholders is very important, the shareholders need to have a career-oriented, and have a firm grasp of the character of the person. As belonging to the internal equity transformation. It must be clear that the equity exit mechanism and restrictions!

Third, the labor union on behalf of the holding type:

1, the enterprise open equity, encourage employees to invest in shares, held by the enterprise labor union on behalf of the holding;

2, the process: the labor union will be registered as a legal person, the election of the union chairman, to change the company's articles of incorporation, the shareholders' roster

4, the number of: generally no more than 20%, to consider the set aside;

Advantages: 1, to reduce the The actual number of shareholders; 2, simplify the shareholder management process; 3, reduce interference and facilitate decision-making;

Defects: 1, electing the union chairman; 2, the establishment of trade unions incurring costs associated with the establishment of trade unions; 3, trade union management issues; 4, there is a possibility of becoming a long-term welfare;

Points to note: the establishment of trade unions require a certain size of the enterprise, to give the trade union the status of a legal person. There are high requirements for incentive design, otherwise it may become a long-term welfare and drag down the development of the company. In addition to the union's shareholding, a new company can also be registered to hold shares on behalf of the company!

Four, performance share-based:

1, this is a share incentive model, when the employee's performance reaches a specified target can be used to purchase company shares of the incentive received;

2, process: assessment and determination of the target, measurement of the shares;

3, the object: the main operator, there are obvious performance goals of the key positions;

4, Quantity: measured annually, the company's share of the new opening is expected to average no more than 5% per year;

Merits: 1, on the basis of the original incentives to strengthen incentives; 2, in the incentives on the basis of continued retention of operational and business talent; 3, results-oriented, performance speaks;

Defects: 1, may increase the cost of incentives; 2, can only be incentivized to the business-type, operational positions 3, the internal balance is more difficult;

Points to note: there has been the implementation of the equity design of the enterprise is more practical.

Description: Both the company's real shareholders, then all need to be responsible for business results! So be sure to understand:

1, the grant object has a certain ability to repay the funds;

2, the company's financial statements are relatively standardized, transparent;

3, the company's development has a certain basis for the development of the direction of the company is also very clear;

4, the company has a certain anti-risk ability;

5, the staff of the company's operation is relatively well understood and also trust the boss!

There is such a metaphor, employees become shareholders of the company's real shares, as if the company "married", once "married", to "divorce" is not so easy!

Therefore, I suggest that the company in the staff "marriage" before the first "love"! To be the company and the staff through the period of intense love, and then consider whether it is appropriate to "marriage" it.

And the partner model is the best way for companies to fall in love with their employees.

Continuing to share, the company how to talk with employees "love"

Wen: Gan Zhiling teacher (microblogging exchange Q&A: gzl5588)

Recommended bosses must see: incentives to employees how to design the performance model? (internal video)

Teacher Profile:

Gan Zhiling:

Deputy Director of the China Performance Research Institute;

China Hongcheng Consulting Chief Consultant;

KSF Compensation Performance Landing Chief Consultant;

He is a "practice school, effect school". Performance management lecturer and consultant;

Has 10 years of experience in performance management practice and research! Every month, he leads a team of performance consultants to different trainee companies to coach the change of compensation and performance management!

Sharing is a virtue, hereby share it with you, hope to help and inspire you! We also welcome your comments and exchanges!