Previously, a number of enterprises sold treasury stocks to employees, especially banks. Earlier this year, Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) sold 3.34 million treasury shares to employees at the price of 10,000 dong / share, while these shares were bought back by the Bank at an average price. 27,387 VND / share.
At Vietnam Prosperity Joint Stock Commercial Bank (VPBank), this bank plans to issue shares to its staff from treasury stocks in 2020 with a volume of 17 million units, selling price of 10,000 dong / share, equivalent to 0.672% of the total number of outstanding shares.
Such shares will be restricted for transfer, up to 3 years: The Bank allows transfer 30% after one year, 35% after two years, the remaining 35% after the third year; If the staff quit their job, they will have to sell the shares at the purchased price.
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This year is the third consecutive year, VPBank has implemented the program of selling treasury stocks to its staff. Two years ago, the Bank sold more than 30 million treasury shares each year, of which General Director Nguyen Duc Vinh and many other senior leaders also registered to buy.
VPBank said, selling treasury shares to employees at preferential prices for the purpose of retaining talents, recognizing the contribution of all levels of staff to the Bank and in fact, this plan is effective. in the past 2 years.
Need to balance the interests of shareholders and employees
In terms of income, besides the main income from salaries and bonuses, the issue of employee preference shares (ESOP) is a factor for employees to decide to stick with the business for a long time.
In corporate governance, ESOP shares are recognized as an important tool to implement an effective HR strategy.
Receiving ESOP shares at a much lower price than the market price and when the company flourishes, the stock price in the market increases will increase the motivation of employees in the company. Employee responsibilities also increase when holding stocks and becoming shareholders of the business.
While retaining good staff and having additional financial resources for business operations, issuing ESOP is one of the forms favored by many listed companies.
However, the issuance of ESOP shares sometimes makes old shareholders unhappy because their ownership ratio is diluted, especially businesses that issue with a high ratio and focus on a group of leaders.
There are concerns shareholders, businesses withdraw money from them to increase benefits for operators. In fact, shareholders' opposition to ESOP issuance is not uncommon.
Therefore, using treasury shares for employee preference is a solution that is easier to get shareholders' consent than issuing new shares under the ESOP program, although in fact, these two things are not different. bag.
In order to have treasury shares, the business must buy in first and this action often has a positive effect, supporting the share price, beneficial for all shareholders.
However, any solution has drawbacks. Selling treasury shares at a low price makes a part of the company's retained profits decrease. As in the sale of 31 million treasury shares to employees last year, VPBank's equity surplus was lost nearly 600 billion dong due to the difference in selling and buying prices.