Jiangxi Copper to launch stock incentive plan
Jiangxi Copper, the mainland's largest integrated copper producer, plans to adopt a stock incentive plan to motivate senior executives in a bid to spur their performance.
The company will offer cash bonuses to senior managers that are linked to its H-share prices over a 10-year period from next year, according to a statement filed with the Hong Kong stock exchange yesterday.
Chairman Li Yihuang and six other senior executives would grant the share appreciation rights, the statement said.
Jiangxi Copper also planned to issue stock options to top executives enabling them to subscribe to new A shares that could be exercised at a discount to the market price, company secretary Pan Qifang said.
Mr Pan said the A-share incentive plan was still awaiting the approval of the China Securities Regulatory Commission.
No new H shares would be issued based on the H-share incentive plan, and hence did not require the commission's approval, he said. However, the scheme still requires shareholders' approval.
'Using stock options or similar plans as part of our employee remuneration packages will align shareholder and management interests. It's in the right direction,' said Guotai Junan Securities analyst Sabrina Xie Lulu.
Last year, the CSRC allowed companies with A shares to use share options as an incentive scheme in employee remuneration packages as part of the watchdog's efforts to improve corporate governance.
Zhejiang-based Zoje Sewing Machine was the first company to award senior managers stock options after the regulator's ruling.
Previously, some companies such as Shenzhen Expressway and China Merchants Bank adopted incentive schemes relating to share performance, but with cash bonuses as the reward.