Gree Electric Appliance announced yesterday that in order to further improve the long-term incentive policy for employees, fully mobilize the enthusiasm and creativity of employees, and improve the cohesion of the company's management team and the competitiveness of the company, the company plans to further launch the second phase of employee stock ownership plan to escort the long-term growth of the enterprise.
If you want employees to struggle independently, you must let employees be the masters of their work and income, so as to stimulate continuous upward energy from the heart and form the final result of self motivation. With the announcement of the second phase of the employee stock ownership plan, Gree Electric and Dong Mingzhu made a move to let more employees be the masters of the company and themselves.
Phase II employee stock ownership plan announced that Gree's cash dividend per share shall not be less than 2 yuan
Previously, Gree announced the first phase of the employee stock ownership plan (Draft) in June 2021 to disclose the company's employee incentive plan. Compared with Gree's phase I and phase II ESOP, it is found that the assessment objectives of the current ESOP are also adjusted compared with the first phase. Specifically, the net profit growth from 2022 to 2023 is not less than 2 billion yuan and 3 billion yuan respectively compared with 2020, and the return on net assets in 2022 and 2023 is not less than 22% and 21% respectively. The cash dividend per share is not less than 2 yuan or the total cash dividend is not less than 50% of the net profit of the current year.
In order to balance the rights and interests of employees in the two phases, ensure the fairness and impartiality of the company's incentive mechanism, and improve the sense of ownership and enthusiasm of employees, Gree Electric has also adjusted the assessment objectives of the first phase of the employee stock ownership plan, that is, the net profit growth from 2021 to 2022 will not be less than 10% and 20% respectively compared with 2020 to 1 billion yuan and 2 billion yuan. At the same time, the assessment index of the return on net assets in 2022 will not be less than 22% (the same as the second phase of the employee stock ownership plan).
Gree Electric Appliance said that since 2021, the complex and changeable macro environment has made the risks, challenges and pressures faced by the company's operation far exceed expectations. In order to fully mobilize the enthusiasm of employees, improve the company's incentive mechanism and ensure the steady growth of the company's future performance under the impact of severe external situation, the company has made certain adjustments to the assessment objectives.
At the same time, Gree Electric also said that the company's operation will not relax due to the reduction of assessment objectives. The company will still take the performance assessment indicators of phase I as its business objectives, and try its best to ensure the realization of future development strategy and performance objectives.
At present, the whole household appliance industry is in a very severe state. According to ovicloud, the retail sales of household appliances in China in the first quarter of this year was 143 billion yuan, a year-on-year decrease of 11.1%, and even there was a rare decline in online channels. On the demand side, the real estate industry is in a downturn, domestic consumption will is weak, and the release of market demand is seriously insufficient. In addition, the price of raw materials continued to rise and remain high, which seriously affected the enterprises of complete household appliances.
Recently, Midea Group is tightening non core categories through layoffs, and further reducing the assessment objectives of equity incentive (the assessment objectives in 2022 and 2023 are reduced to 20% and 18% of the return on net assets). Some analysts pointed out that "with the advent of the cold winter in the home appliance industry, many home appliance enterprises have started layoffs and lowered assessment indicators to increase revenue and reduce expenditure, eliminate fat and lose weight, and Gree released the second phase of employee stock ownership plan, which may be beneficial for the company to deal with the downward challenges of the whole industry."
The growth of traditional channels is weak, and Gree needs to get out of the value depression
Since 2012, the net profit of Gree Electric has increased from more than 7 billion yuan to more than 22 billion yuan for several consecutive years, up to 26.4 billion yuan. Since its listing, the cumulative cash dividend rate has exceeded 100 billion yuan (including the dividend plan of 20 yuan for 10 shares in 2021). The total cash dividend per share implemented in the past three years has reached 9.70 yuan.
Behind the continuous growth of performance, the lack of incentive mechanism has always been a controversial point of Gree Electric. In the past 13 years, Gree Electric has not implemented any incentive measures linked to equity. The first phase of employee stock ownership plan was launched only in 2021, covering only more than 4000 people. The existing incentive policies of the company are difficult to match the growing demand for talents.
In particular, the current macroeconomic downturn is superimposed, the capacity of domestic household air conditioners is gradually approaching saturation, and the traditional channels of the household appliance industry are weak. Gree appliance is also at the key time node of seeking channel transformation, promoting product internationalization and business diversification. It needs a complete incentive mechanism to stimulate the subjective initiative of employees and attract more excellent talents to promote enterprise reform. People-oriented can accelerate the butterfly change of enterprises.
According to Gree, when planning the key work in 2022, the company also proposed to strengthen the construction of talent echelon, create a talent gathering highland, and improve the talent selection and training mechanism at all levels. Therefore, the launch of the second phase of the employee stock ownership plan at this time is also seen as helping to complete the shortcomings of corporate governance, further improve the talent training system, realize high-quality talent supply and create a new situation of diversified development.
Affected by the sentiment of the capital market and the overall market of the industry, the share price of Gree Electric Appliance was once in a depression. With the implementation of the company's latest employee stock ownership plan, Gree is expected to further mobilize the enthusiasm of the company's core management team and employees and build a community of interests. In addition, the continuous promotion of online and offline integration by Gree is also conducive to improving the profit structure, accelerating diversification and industrial chain layout, and continuously improving the market-oriented and modern operation level of enterprises.
However, for Gree, the launch of phase I and phase II employee equity incentive plan may be beneficial to solve some problems in the company's current stock price and internal operation management, but it still needs time to test whether it can accumulate a little and achieve high-quality development in the end.