On the evening of April 22, BYD (002594. SZ) announced that the company plans to repurchase shares for the employee stock ownership plan. It is expected that the repurchase amount will not exceed 1.85 billion yuan, not less than 1.8 billion yuan, and the repurchase price will not exceed 300 yuan / share. The type of shares to be repurchased is RMB common shares (A shares) issued by the company.

At the same time, BYD also disclosed the 2022 employee stock ownership plan (Draft) (hereinafter referred to as the draft). The draft shows that the total number of people participating in the ESOP will not exceed 12000. The ESOP will transfer the company’s shares to be repurchased by the company through non transaction transfer and other ways permitted by laws and regulations. The transfer price is 0 yuan / share, and the participants do not need to contribute.

Hao threw 1.8 billion yuan to buy back shares, and the price of 0 yuan / share was transferred to employees. Behind BYD’s move, attracting and retaining excellent talents and fully mobilizing the enthusiasm of core backbone personnel are undoubtedly one of the important reasons.

The competition in the automobile industry is becoming more and more fierce, and the talent defense war of automobile enterprises is upgraded. In recent years, the rise of high-end enterprises and the incentive mechanism of high-end enterprises to seize the share of the traditional market, as well as the rapid rise of high-end enterprises, have been accelerated to prevent the loss of high-end talents.

In fact, equity incentive, share award, employee stock ownership and other incentive mechanisms have long existed in the automotive industry. However, BYD’s “0 yuan purchase” employee stock ownership is not common in the automotive industry.

According to the announcement, under the condition that the share repurchase price does not exceed 300 yuan / share, it is estimated that the number of shares to be repurchased will not be less than 6166700 shares, accounting for about 0.212% of the total issued share capital of the company according to the calculation of the upper limit of the repurchase amount of 1.85 billion yuan; According to the calculation of the lower limit of the repurchase amount of RMB 1.8 billion, the number of shares repurchased is expected to be no less than 6 million, accounting for about 0.206% of the total issued share capital of the company. The specific number of shares repurchased is subject to the actual number of shares repurchased at the expiration of the repurchase period.

Based on the closing price of BYD’s shares of 234.04 yuan / share on April 21, the number of underlying shares involved in the employee stock ownership plan does not exceed 7.9046 million shares (accounting for 0.27% of the company’s current total share capital).

This share repurchase is used to implement the employee stock ownership plan. The total number of participants in the ESOP is no more than 12000, and the participants include the company’s employee representatives, supervisors and senior managers (14 in total), as well as the middle-level managers and core backbone employees of BYD group (no more than 11986). In terms of distribution proportion, there are 14 employee representatives, supervisors and senior managers, and 553300 shares are proposed to be distributed, accounting for 7% of the total share; Other employees plan to distribute about 7.3513 million shares, accounting for 93% of the total share.

The employee stock ownership plan will transfer the company’s shares to be repurchased by the company through non trading transfer and other ways permitted by laws and regulations. The transfer price is 0 yuan / share, and the participants do not need to contribute. If the transfer cannot be completed within 36 months after the completion of share repurchase, the unused shares will be cancelled and the registered capital will be reduced according to relevant procedures.

BYD’s employee stock ownership plan covers the core employees in various positions of the group, such as technology, operation, marketing and integration. BYD said that these employees are the main executors of the company’s strategy and the mainstay of the team, and play a vital role and influence on the company’s overall performance and long-term sustainable and stable development. This is conducive to the establishment and improvement of the company’s cohesion and shareholder sharing mechanism, further improve the company’s long-term interests and maximize the company’s long-term competitiveness.

30% revenue growth in 2022

It is worth noting that BYD has also set performance appraisal standards and trading restrictions for the employee stock ownership plan.

The draft stipulates that the underlying shares held by the employee stock ownership plan will be unlocked in three phases. The unlocking time points are 12 months, 24 months and 36 months from the date when the company announces the last transfer of the underlying shares to the name of the employee stock ownership plan. The proportion of the underlying shares unlocked in each phase is 30%, 30% and 40% respectively. The specific unlocking proportion and quantity of each period shall be determined according to the results of the company’s performance assessment and individual performance assessment.

The employee stock ownership plan takes three fiscal years from 2022 to 2024 as the performance evaluation year, which is evaluated once in each fiscal year. The operating income of the previous year is the base, and the annual revenue growth rate is not less than 30%, 20% and 20% respectively.

The announcement points out that if the company’s performance appraisal indicators are met, the underlying stock rights and interests corresponding to each period of the employee stock ownership plan can be unlocked. If the performance evaluation index of the company corresponding to an unlocking period is not reached, the underlying stock rights and interests corresponding to the unlocking period shall not be unlocked and shall be recovered by the company at the price of 0 yuan.

According to the annual performance report of 2021 previously disclosed by BYD, the operating revenue in 2021 was 216.142 billion yuan, a year-on-year increase of 38.02%; The net profit attributable to shareholders of listed companies was 3.045 billion yuan, a year-on-year decrease of 28.8%. This also means that to achieve the first unlock, BYD’s revenue this year should not be less than 280.985 billion yuan.

On April 18, BYD released a performance forecast, which showed that the company’s net profit attributable to shareholders of Listed Companies in the first quarter of this year was expected to be about 650-950 million yuan, with a year-on-year increase of 174% - 300%.

It should be noted that BYD’s employee stock ownership plan has been reviewed and approved by the board of directors, but it can only be implemented after being approved by the general meeting of shareholders.

Upgrading of talent defense war of automobile enterprises

The competition in the automotive industry is becoming more and more fierce. The new forces of car making that once played the role of subverter, as well as the cross-border technology companies have started the talent competition with high salary and equity incentive mechanism. In recent years, a large number of high-end talents in the industry have joined the team of new car making, and the traditional car enterprises are facing the state of “blood loss”.

Earlier, it was reported that Gu Hongdi, President of Xiaopeng automobile, had an annual salary of 435 million yuan. Xiaopeng automobile responded that more than 99.5% of the salary disclosed by the executive was equity incentive accumulated for many years, not the income in a year. The actual annual salary of the executive was 200 yuan