The State-owned Assets Supervision and Administration Commission ("SASAC") of the State Council has recently issued the Circular on Matters Concerning Further Implementation of Stock Ownership Incentives among Listed Companies Controlled by Central Enterprises (the "Circular").
The Circular reinforces the positive incentive, grants and delegates powers to a larger extent, and clarifies the normative requirements for the implementation of stock ownership incentives, while requiring central enterprise groups to undertake primary responsibilities. The Circular outlines measures for improvement in four aspects, including preparing a scientific stock ownership incentive, improving the business performance assessment for stock ownership incentive, supporting companies listed on the SSE STAR Market in implementing stock ownership incentives, and optimizing the stock ownership incentive management system. Among others, the Circular expounds on the targets of stock ownership incentives offered by listed companies controlled by central enterprises, forms of incentives, quantity of stock ownership to be offered, the price at which stock ownership will be offered, and yields from stock ownership incentives. The proportion that the number of the offered stocks accounts for is improved; specifically, a listed company engaged in science and technology innovation will be allowed to offer up to 3%, instead of 1%, of its total capital stocks when it launches the stock ownership scheme for the first time, and the aggregate amount of stocks offered in two complete years by a listed company with special needs, such as material strategic transformation, is loosened to 5%.