Telecom equipment maker ZTE announced its plan to issue stock options to 2,013 employees as incentives.
ZTE on March 23 reported that its net profit would have been RMB 3.825 billion in 2016, without a provision related to the company’s settlement of a case in the United States.
ZTE said the stock option incentive program will help the company retain talent, and enhance the loyalty of the top management and key personnel. The program is subject to the approval of ZTE shareholders.
The 5-year stock option incentive program to 2,013 individuals for 150 million shares or equal to 3.6 percent of the company’s share capital is aimed at rewarding employees for achieving its revenue performance in coming years.
The exercise price of the stock options, which will be issued in three tranches, will be RMB 17.06 each, which was the average trading price of ZTE’s shares on the Shenzhen stock exchange on 19 April.
ZTE said the stock option incentive program is subject to certain financial performance metrics being satisfied by the company. Stock options in the first tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2017 financial results, with annual net profit at least 10 percent higher than RMB 3.825 billion.
Stock options in the second tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2018 financial results, with annual net profit that year at least 20 percent higher than RMB 3.825 billion.
Stock options in the third tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2019 financial results, with annual net profit that year at least 30 percent higher than RMB 3.825 billion.
