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Zijin Mining Launches New Round of Medium-and Long-Term Equity Incentive Plan
May 16,2024
On November 14, Zijin Mining issued an equity incentive "serial gun", which plans to grant 42 million shares to 13 management members, including Chairman Chen Jinghe, at the average price of 12 yuan in the company's stock trading in the 20 trading days before the announcement; at the same time, it will implement an employee stock ownership plan for no more than 2747 company management and technical backbone personnel, with a grant price of 8.4 yuan per share. This is a new round of equity incentives following the implementation of the first phase of the employee stock ownership plan in 2017 and the implementation of the restricted stock incentive plan in 2020.
It is understood that on October 19 this year, Zijin Mining announced the adjustment of the repurchase stock price. On November 7, it completed the repurchase plan of about 0.5 billion yuan for a total of 42.2 million shares. A week later, on November 14, it launched the employee stock ownership plan involving more than 2700 people. From the perspective of incentive objects, in addition to the middle and high-level employees, the employee stock ownership plan also covers more than 2000 core employees such as young talents and highly educated personnel, and is transferred at a 30% discount (I. e. 8.4 yuan per share), reflecting the company's emphasis on the construction of the core talent benefit sharing mechanism.
The stock option incentive plan announced on the same day is a large amount of stock options implemented by Zijin Mining to the management. It plans to grant 13 management members a total of 42 million stock options. On the one hand, it reflects the confidence of Zijin management team in future development and stock value. On the other hand, it is also a response to the market's expectation that Zijin management will increase the number of shares. This stock option incentive plan, the first phase of 24 months after the three-year exercise, locked in operating income, return on net assets, asset-liability ratio of three key indicators, and promised not to be lower than the industry benchmark enterprise 75 points value. In the case of cyclical fluctuations in metal prices, this is not a small challenge for management.
The employee stock ownership plan and the management stock option incentive plan further bind the management and core employees with the company's interests and shareholder value, which will help to establish and improve the benefit sharing mechanism between employees and all shareholders, fully mobilize the enthusiasm and creativity of key employees, enhance the cohesion of employees and the competitiveness of the company, and guide the management to pay attention to long-term performance and the long-term market value of the company.
From the previous equity incentives, Zijin Mining has brought rich returns to the company and shareholders through employee equity incentives. In 2017 and 2020, the company launched the first phase of employee stock ownership plan and restricted stock incentive plan respectively. The company's operating performance achieved leapfrog growth, from the net profit of 1.84 billion yuan in 2016 to 20 billion yuan in 2022. The company's market value has continuously crossed the 100 billion, 200 billion and 300 billion marks, becoming the top 10 metal mining company in China with a large market value and the world's top 10 metal mining companies. By November 14, the company's market value was 312.2 billion yuan, up 18.6 percent from the beginning of the year.
At the beginning of this year, Zijin Mining announced the newly revised three-year plan and the 2030 strategic goal, and proposed that the global international talent team is the key guarantee to achieve the grand goal. Zijin Mining's implementation of employee stock ownership plan and stock option incentive plan in this context demonstrates the company's confidence in future development and its determination to share development results with employees.
The current round of employee stock ownership plan and stock option incentive plan still need to go through the relevant procedures and submit them to the general meeting of shareholders of the company for deliberation and approval before they can be implemented.
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