Sunshine Insurance Plans New Employee Stock Ownership Program, Targeting Core Staff and Veteran Employees

Deep News
Oct 05

Insurance companies have been frequently launching employee stock ownership plans recently. Nearly a decade later, SUNSHINE INS is planning to introduce another employee stock ownership plan following its public listing. Recently, Sunshine Insurance Group Co., Ltd. (SUNSHINE INS, 06963.HK) announced that it will convene the company's first extraordinary general meeting of 2025 on October 22, with only one agenda item: to review and approve the adoption of an employee stock ownership plan.

SUNSHINE INS stated that to adapt to the new circumstances facing the company after its listing, strengthen strategic implementation and goal achievement, further enhance employees' sense of belonging and responsibility, and achieve value sharing between the company and its employees, the company intends to establish an employee stock ownership plan. This plan will primarily target core staff and veteran employees who joined early at Sunshine Insurance Group and its member companies.

The employee stock ownership plan, named "Evergreen Foundation," shows that participants will include personnel who contribute to the company's performance improvement and medium-to-long-term development, such as senior management, key position holders, and core employees. Specifically, this includes: founding team members of the company, management team members at all levels of SUNSHINE INS and member companies, management personnel, key position holders, and core employees in business management, technology, investment, sales, and other areas.

SUNSHINE INS noted that the above employees should generally have at least two years of service. For veteran employees with over ten years of service, conditions may be moderately relaxed; for those with less than two years of service but deemed necessary for inclusion, approval from the company's board of directors is required.

Regarding shareholding methods and share sources, SUNSHINE INS's employee stock ownership plan intends to hold Sunshine Insurance Group shares through a trust plan. Shares will be sourced from shareholder transfers, purchases of company stocks issued in the open market, and company repurchases. SUNSHINE INS will sign trust contracts with trust institutions on behalf of the shareholding plan, and trust institutions will fulfill their fiduciary management obligations for the shareholding plan assets according to the trust contract and shareholding plan provisions.

This employee stock ownership plan will have a duration of 10 years from its establishment date. Unless the board of directors decides otherwise based on shareholder meeting requirements, the duration will automatically extend. When the shareholding plan ceases to exist, the shareholder meeting will authorize the management committee to liquidate the shareholding plan assets with the trust institution.

To further establish and improve long-term incentive mechanisms, this employee stock ownership plan also sets lock-up periods: employees below department level at SUNSHINE INS and core subsidiaries have a 3-year lock-up period, department-level employees have a 4-year lock-up period, and management team members have a 5-year lock-up period. During the lock-up period of their respective shareholding plan portions, holders cannot withdraw; after the lock-up period expires, disposal will be conducted according to listing rules and relevant laws and regulations, with annual disposal ratios generally not exceeding 25%, and specific disposal amounts determined based on the above rules while fully respecting holders' wishes.

Actually, before its listing, SUNSHINE INS had already launched an employee stock ownership plan early on. According to the company's 2024 annual performance report disclosure, SUNSHINE INS is one of the insurance institutions in China approved by relevant regulatory authorities to implement employee stock ownership plans. The company began implementing its employee stock ownership plan in 2015, and following approval at the shareholders' meeting held on February 4, 2016, issued and allocated 440,780,000 domestic unlisted shares to the employee stock ownership plan, representing 3.83% of the company's issued shares as of the latest practicable date. The subscription price for these shares was 4 yuan per share, with the shares held by the employee stock ownership plan locked for three years from the company's listing date. As of the latest practicable date, the equity in the employee stock ownership plan was held by 3,688 individuals.

SUNSHINE INS was established in July 2005, initially starting with property insurance business. Today, the group owns multiple professional subsidiaries including property insurance, life insurance, credit guarantee insurance, asset management, and medical health. On December 9, 2022, SUNSHINE INS was listed on the Main Board of The Stock Exchange of Hong Kong Limited, becoming China's tenth listed insurance company.

As of the close on September 30, SUNSHINE INS closed at HK$3.840 per share, up 2.13%.

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