Suning Appliance Co plans to give senior executives share incentives.
The Nanjing-based appliance retailer will grant 43.76 million stock options, accounting for 2.93 percent of its total shares, to directors, excluding outside directors and independent directors, middle-level and senior executives and key staff, it said in a statement to the Shenzhen Stock Exchange yesterday.
A total of 40.76 million options will enable the holders to buy shares at an exercise price of 58 yuan, a 26-percent gain on yesterday's close, while the remainder, for special staff nominated by the chairman, will be priced when granted, according to the draft.
"The scheme is to improve the company's executive incentive review system and encourage executives to develop with the company to secure a long-lasting and stable growth," Suning said.
The incentive scheme will be valid for five years but it still needs approval from a shareholders' meeting and the country's securities regulator.
The plan could help Suning stabilize its management group, save labor costs and raise its value with a clear expectation of business growth, Shenyin Wanguo Securities Co said in a report.
"The scheme is positive news for Suning as the exercise price will enhance investors' confidence in the company's development," according to Haitong Securities Co.
The two stock houses both suggested investors buy the company's shares. Suning rose 1.79 percent to close at 46.11 yuan yesterday.
(Shanghai Daily July 30, 2008)