Public companies in China, among the world’s worst stock market performers in 2005, started the year with a new tool: stock incentives to improve profits and governance.
Incentive programs, involving as much as 10 percent of a company’s stock, have been allowed since the start of the new year, the China Securities Regulatory Commission said on its Web site on Wednesday.
That was the level suggested in a draft rule published last year. Both shares and options can be used.
Incentive programs – which can be for directors, supervisors, senior executives or other employees – should be carried out only by companies that have disposed of nontradable stock, the statement said.