Equity incentives for listed companies in the automotive industry are almost zero

A week after the departure of two senior executives of SAIC, it was reported that the SAIC Group, which is about to achieve overall listing, is expected to launch an equity incentive mechanism during the year. It is reported that this incentive mechanism may even cover ordinary employees. At the beginning of May, Shuanglin shares (300100), a small and medium-sized board-listed company that focuses on the research and development of auto parts, announced the suspension of the implementation of the equity incentive plan for half a year.

As an industry with a high degree of marketization, the modern corporate system of listed companies in the automotive industry has been fully implemented. However, the equity incentive system that is necessary to establish a modern enterprise system is rarely considered in the automotive listed companies. According to the reporter’s investigation, when many listed companies in the capital market launched equity incentives, listed companies in the automotive industry were almost blank in this regard.

Few listed companies in the automotive industry have implemented the equity incentive mechanism called equity incentives, which is a kind of incentive method that is currently used by listed companies. That is, as the company’s shareholdings become increasingly fragmented and management technologies become increasingly more complex, in order for corporate managers (including directors, supervisors, senior management personnel, and core technical personnel) to be more concerned about the company’s long-term value in the business process, the company will Give these employees certain economic benefits.

The reporter consulted the basic information of the listed automobile companies and the announcements in recent years and found that the listed companies of the automobile have rarely been involved in equity incentives, which is in sharp contrast to the active “incentives” of listed companies in other industries. According to the survey, a few auto listed companies such as FAW Car (000800), FAW Fuwei (600742) and Shuanglin have successively implemented equity incentives, but due to many problems in implementation, they were eventually forced to stop implementing this. mechanism. Several listed companies did not disclose the specific reasons for suspending equity incentives. In the semi-annual report last year, FAW Cars recalled the equity incentive mechanism and stated that its parent company, FAW Group, promised that after the completion of the equity division reform, it will be entrusted to the company’s board of directors through the FAW Cars Shareholders' Meeting in accordance with relevant national laws and regulations. The implementation of the equity incentive plan and the commitment to propose that the exercise price of stock options when the company implements the equity incentive plan is not lower than the audited net asset value per share in the most recent year.

In the face of the equity incentive mechanism, the listed companies of the auto industry have only issued a weak echo of the accusations. The vast majority of auto listed companies have not even launched plans for equity incentives.

"The listed companies of automotive OEMs are mostly state-owned enterprises. The conditions for these companies to implement the equity incentive system are not perfect, and the approval procedures are strict. Therefore, there are fewer listed companies that implement equity incentive measures in the automotive industry." National Securities Auto Industry analyst Cao Cao Crane said.

Liu Feng, a researcher in Southwest Securities’ automotive and parts industry, said: “Equity equity incentives are the management of capital market value when the capital market develops to a certain extent. Because of different ownership systems, there are differences in the implementation conditions of this incentive approach at home and abroad. Equity-incentive companies do not have ownership issues, and do not have any regulatory or legal obstacles, which can give high-level executives high equity and incentives for management to provide guarantees for the development of enterprises. Although this is a specific type of business operation, In China, due to differences in ownership, equity incentives have different methods and degrees.Because a large part of listed companies are state-owned enterprises or state-owned enterprises, which involve sensitive issues such as state-owned assets and executive wages, they need to be prudent to implement them. The approval of the state-owned assets management department is carried out within the framework of many laws, regulations and policies."

The background of the state-owned enterprises of most listed auto companies seems to hinder the implementation of equity incentives.

Incentives are not reserved for "golden handcuffs"

Since equity incentives are intended to retain talent, does SAIC's upcoming equity incentive mechanism have a certain relationship with the departure of executives? The analysts given the interview gave the unanimous answer: The equity incentive is indeed to retain talent, but it is not the “golden handcuffs” to stay.

“Equity incentives can reduce moral hazard. When the long-term interests sought by business owners contradict the short-term interests pursued by managers (professional managers), equity incentives can effectively resolve the conflicts between management and their The interests are tied up with the company's development. That's why some people call equity incentives "golden handcuffs." Liu Feng said, "Whether managers' management behavior is consistent with the long-term interests of shareholders, in addition to their internal interest-driven, Affected by a variety of external mechanisms, equity incentives may not necessarily prevent the loss of talent.” According to reports, professional managers of multinational companies such as BMW, Mercedes Benz, and Volkswagen maintain equity in developed markets in Europe and America, but the mobility of personnel still remains. Great. Talent retention is determined by comprehensive reasons. In addition, the effectiveness of the equity incentive mechanism depends to a large extent on the integrity of the manager's market. Only under the right conditions, equity incentives can play an active role in guiding long-term behavior of managers.

Cao He believes that whether the equity incentive mechanism can fully play its role is not a matter of internal implementation of the company, and the most important thing is the soundness of China's capital market. The dividends of listed companies must become the main investment targets in order to fully mobilize the enthusiasm of the managers. This process will be long-term.

Equity incentives are based on statistics. From the beginning of 2005 to March 31 this year, a total of 273 listed companies in the Shanghai and Shenzhen A-share markets announced the equity incentive mechanism. In addition, there are some companies that are developing plans in this area. Equity incentives have basically become a trend in the establishment of listed company systems.

"In equity incentives, we must avoid shady transactions and maliciously drive stocks to profit, and we must not arbitrarily lower the incentive threshold. This will not only result in no incentive, but will damage other shareholders' rights and disrupt the normal order of financial markets. It is not easy for the SAIC Group to take this step and it is necessary to take into account many issues, and of course, with the development of the capital market. The number of automobile professional managers has gradually increased, and more and more auto listed companies will launch equity incentives, said Liu Feng.