Enterprises can also implement employee incentive plan which is applicable to companies already listed in Hong Kong and companies to be listed in Hong Kong in the form of trust. The listed company (the trustor) entrusts the trustee to set up a trust. It is agreed that the purpose of the trust is to motivate the employees and the beneficiaries are the employees of the company. Then, the enterprise injects the funds/stocks/options into the trust through reservation/follow-on offering/purchase from the secondary market, and the trustee is responsible for managing and using them. After the specific conditions are met, the trustee will distribute the rights and interests to the beneficiaries (employees) in accordance with the rules, time and ownership conditions set out in the plan, and the employees can sell the shares to obtain the incentive fund or continue to hold the shares of the company.
- Risk isolation: enterprises can arrange assets through trust to avoid its potential risk of asset loss caused by economic recession, thereby isolating and protecting the assets in the trust;
- Professional asset management: the trustee, a regulated licensed institution with professional administrative and asset management qualifications, can manage and distribute rights and interests to designated beneficiaries in a more efficient and safe way and can achieve the goal of asset appreciation;
- The trustee has a complete set of strict and complete management system, which is conducive to standardized management and prevention of risks;
- Enhance the flexibility of the plan: in the case of employee's entry, resignation or disqualification, the list of beneficiaries can be supplemented or adjusted according to the plan and the trust, so as to ensure that the company's stocks/options will not be affected, and also protect the interests of the company and other employees or beneficiaries;
- It can reduce the training cost, human resources and unnecessary cost of the executive plan of the listed company.