The company has announced a new share option scheme for its executives and a stock ownership scheme for core management and technical personnel.
Thirteen senior executives will be granted 42 million share options and 2,747 people will get up to 42.2 million shares at significantly lower prices.
The company has unveiled multiple similar incentive programs in recent years, covering both executives and employees.
On November 14, Zijin Mining, a major global metals miner, announced its plan to grant options of 42 million shares to 13 company executives, including its Chairman Chen Jinghe. It also launched an Employee Stock Ownership Scheme for up to 2,747 core management and technical personnel.
The offering of options is priced at RMB12.00 per share, based on the average trading price of the company’s A shares for the 20 trading days before the announcement. The Employee Stock Ownership Scheme shares, which will be bought for up to RMB354.48 million, are priced at RMB8.4 per share, a 30% discount from market prices.
These two mid- and long-term incentive schemes will further align the management team and core employees with the company’s interests and shareholder value. As mechanisms for sharing benefits between employees and all shareholders, they serve to motivate core employees, stimulate creativity, and improve cohesion and the competitiveness of the company. They will also encourage the management to focus on long-term business performance and the company’s long-term market value.
Mid-and-Long-term Share Option Incentive Scheme
Participants: Thirteen executive directors and senior executives.
Source of Underlying Shares: Private placement of common A shares issued by the company.
Number of Underlying Shares: 42 million, accounting for approximately 0.16% of the company’s total shares at the time of the announcement. The grant will be a one-time issuance, with no reserved options for future grants.
Validity Period: Up to 60 months from the grant date until the options are fully exercised or canceled.
Performance Assessment Targets: After an initial lock-up period of 24 months, the stock options will vest over three years. The performance targets are based on three key metrics: operating income, return on net assets, and debt-to-asset ratio. Additionally, a commitment is required to ensure that the performance will not fall below the 75th percentile of benchmark peers.
Amid cyclical fluctuations in metal prices, achieving the targets will be challenging for the management. They underscore the management’s confidence in the company’s future development and stock value, while also meeting the market’s expectations for the management to increase holdings of company stocks.
Employee Stock Ownership Scheme
Target Holders: Up to 2,747 core management and technical personnel.
Source of Underlying Shares: 42.2 million common A shares repurchased by the company for approximately RMB500 million before November 2, 2023.
Issue Price: RMB8.4 per share.
Up to 42.2 million shares, approximately 0.16% of the company’s total shares, will be issued, raising up to RMB354.48 million.
Notably, the scheme covers more than 2,000 key personnel and outstanding young employees, highlighting Zijin’s recognition of the value of its core personnel and young professionals.
Sharing Benefits to Drive Ambitions
In recent years, Zijin has launched multiple employee stock incentive programs, sharing the fruits of growth with shareholders, investors, and employees. This includes the first Employee Stock Ownership Scheme announced in 2017 and the Restricted Stock Incentive Scheme of 2020.
During the period, the company achieved remarkable growth in operational performance, with net profit attributable to shareholders surging from RMB1.84 billion in 2016 to RMB20 billion in 2022. The company’s market capitalization also successively surpassed RMB100 billion, RMB200 billion, and RMB300 billion.
At the beginning of 2022, Zijin released its Three-Year (2023-2025) Plan and 2030 Development Goals, stressing the need to build a globally competent workforce to help achieve its ambitious objectives. The new equity-based incentive plans demonstrate the company’s confidence in its future development and its determination to share growth benefits with the employees.
Translator: Jian Reviser: Lin Xinjing Editor-in-Chief: Wang Jie