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Stock options aim to help retain top staff

Update: June, 15/2013 - 09:45

HA NOI (VNS)— A growing number of listed companies are launching Employee Stock Ownership Plans (ESOP) in a bid to increase their charter capital while providing incentives to retain qualified employees.

ESOP is a type of employee benefit plan that buys and holds company stock for the benefit of a broad group of employees. This programme is also used to align the interests of a company's employees with those of the company's shareholders.

Earlier this month, leading private sector business Masan Group (MSN) issued nearly 18 million shares out of a total of 20 million shares planned for its ESOP this year to 28 employees. The company said this share distribution aimed to reward employees for their accomplishments at work.

These types of shares are freely tradable on the stock exchange after their distribution. MSN shares are being traded at around VND100,000 (US$4.76) a share.

Also in early June, software giant FPT Corp (FPT) reported it issued over 1.35 million shares to 89 employees who made outstanding contributions to the company last year.

These shares are subject to a transfer restriction within three years of issuance, however. FPT closed yesterday at VND45,000 ($2.14) a share.

Many other listed companies at their shareholders' meetings this year revealed similar ESOP programmes.

Sacombank (STB) leads the trend with a plan to issuing 32.2 million shares to its key employees. Sucrerie De Bourbon Tay Ninh (SBT) is close behind with a plan to distribute 6.57 million ESOP shares, equivalent to 4.93 per cent of its charter capital, to its loyal staff.

Company such as seafood processor Hung Vuong Corp (HVG), property developer Tan Tao Investment Industry Corp (ITA), Saigon Securities Inc (SSI), Ben Tre Aquaproduct Import and Export Co (ABT) and furniture maker Dai Chau Group (DCS) are also devoting attention to ESOPs.

All of these companies announce their ESOPs as part of efforts to retain high-performing employees.

However, according to many market observers, companies should make clear how this programme will be carried out and who can enjoy this benefit to ensure fairness and transparency. — VNS


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