On the first working day after the holiday, Wen Ju officially implemented the equity incentive plan he designed in the company, and received unanimous high praise from almost all management.
Just like Wen Ju said before, if all the executives of a company have a part-time mentality, they will not be able to go far.
With equity incentives, everyone can think in one place and work hard in one place.
After unanimously passing the meeting, Wen Jue came next door and happily told Gu Yun the news.
"I'm telling you, it went very smoothly. Everyone thought it was a good thing, and it also aroused everyone's enthusiasm."
During the holidays, Gu Yun once said that he would first use Coffee Justice as a pilot. If the management gets good feedback, he would then consider implementing it throughout the entire park group.
"Old Book of Tang" says: "Wealth gathers and people disperse, wealth disperses and people gather together." These eight words effectively reveal the essence of a company's development.
The core elements of the industrial era are machines and capital. In the era of knowledge economy, the core elements have gradually transformed into human capital, and the dependence on people has gradually increased. Therefore, equity incentives for core personnel have become even more important in this era.
"Then you say, the Paradise Group is so big and each company's business is different. How should we implement equity incentives down to the details?"
After finding an empty conversation room, Gu Yun and Wen Ju sat together, with a laptop in front of them, and their personal assistant He Xuan brought two cups of hot tea.
"First of all, we must clarify our consensus again. As a long-term incentive tool, the sustained passion burst out by equity incentives is incomparable to short-term incentive tools such as wages, commissions and bonuses."
Wen Jue took a sip of tea to moisten his throat, pointed at the document on the screen in front of him, and his expression became serious.
"really."
Gu Yun nodded.
Social generational change has promoted the transformation from the original employment system to a partnership system. At present, for young people, ordinary methods of retaining people such as salary, relationship, and career are no longer the most effective methods.
Equity incentives can effectively bundle corporate interests with personal interests. Therefore, in order to ensure the continued healthy development of the enterprise, it is imperative to design an equity incentive plan for the Paradise Group.
"After designing the plan, we still need to hold a mobilization meeting to solicit everyone's opinions. Therefore, we designers must first have a deep understanding of the significance of equity incentives so that the people below can understand that the decision-makers have always been thinking about everyone's interests."
In fact, the importance of equity incentives has two major parts. One is to integrate intelligence through equity incentives, including attracting core talents, retaining core talents, motivating core talents, and replacing old and new core talents.
The second is to provide financing for the next development of the company through equity incentives.
From the current point of view, if capital operations are required and investment institutions are interested in investing, the company must have a complete governance structure.
Except for some extremely promising sunrise industries or fields, investment institutions and investment companies do not invest in the founder alone, but in a team.
Therefore, when many investment institutions make investments, they generally require the company to set up an equity incentive pool.
When Wen Jue said this, He Xuan asked in a low voice.
"This kind of good thing requires everyone's opinions. Isn't it unanimous?"
"That's not necessarily the case. It still depends on the industry and timing."
Wen Jue smiled and shook her head. Under Wen Qingshan's careful guidance, she became half an expert in this field.
Equity incentives have always been a double-edged sword. Whether or not a company implements equity incentives, or if it is improperly implemented or implemented at an inappropriate time, will cause irreparable losses to the company.
"For example, industries such as intellectual services, high technology, and the Internet need equity incentives more. On the contrary, industries such as capital-intensive and resource monopoly industries have less demand for equity incentives."
"In terms of timing, in short, there are four stages."
Everyone present was from his own family, and Wen Jue knew everything. He pulled up a mind map of the four stages of enterprise development from his computer and talked about it.
In the early stages of entrepreneurship: when the company is initially established, talent is the key, and equity incentives at the partner level are mainly used, often with real stock equity incentives;
Growth stage: The company has passed the start-up survival stage and is in the rapid growth stage. It is the best stage to implement equity incentives. Core executives are given real equity, and core technical personnel and middle-level personnel can consider options or virtual equity;
Mature stage: The company already has a large scale and industry status. The company will consider entering the capital market. It needs a round of equity incentives before going public, mainly considering real stock equity incentives;
Recession period: In the recession period after high growth, equity is no longer attractive, and cash incentives should be the mainstay.
“It’s so complicated”
He Xuan stuck out her tongue. Although she had been with Gu Yun for a while, Gu Yun, who founded such a large company, was still just a wild boy.
He can figure things out through his foresight, but when it comes to scientific management, he is still a bit out of touch.
"Of course. I have been studying such a thing for the past two months, and with the personnel changes, I am exhausted."
Wen Jue breathed a long sigh of relief and rubbed his neck.
"Okay, tell me what to do next. Coffee Justice is actually quite different from the other companies in the Paradise Group. We need to have a main idea."
Gu Yun turned the pen in his hand and brought the topic back to the topic.
Dividing stock rights or options is not the purpose. The ultimate goal is to motivate employees through dividing shares, thereby improving the company's performance and accelerating development.
When it comes to implementation, a set of detailed processes and steps are needed to fully explore the demands of core employees and formulate reasonable plans that suit the company's development needs.
"Okay, next, I will tell you one by one. If you have any questions, you can always ask questions."
"We must first conduct research and diagnosis within the company, conduct full interviews with existing core personnel to be incentivized, and understand everyone's understanding of equity incentives, related demands, and any suggestions on equity incentive pricing."
This chapter is not finished yet, please click on the next page to continue reading the exciting content! After that, Wen Jue opened another folder, clicked on the electronic version of the relevant information, and explained the specific operation process.
"Then comes the core content, which is to design incentive plans for different branches of the Paradise Group. Through preliminary research and diagnosis, combined with different branch industries, future operation plans, and some ideas from the management, a preliminary plan is developed and then provided to the core of the company.
Shareholders, the board of directors and other decision-makers will discuss and decide.”
“After the initial equity incentive plan is approved by the company’s decision-making level, a very important step is to hold a mobilization meeting within the company so that both the intended recipients and the unauthorized recipients understand the company’s equity incentive rules, and lay the foundation for subsequent incentive recipients to sign agreements.
"
Having said this, He Xuan and Gu Yun both nodded involuntarily, feeling that it was necessary.
We have been working hard in the workplace for so long, and we have seen many disputes over the distribution of interests. If relevant matters can be made public through meetings, a lot of subsequent troubles will undoubtedly be avoided.
In actual cases, many companies do not hold meetings to explain the content of equity incentives in the early stage, but directly give the incentive recipients an agreement to sign.
This makes people feel bad. On the one hand, most core employees are unfamiliar with equity incentives. On the other hand, many terms of the agreement are unclear, causing many employees to look confused or think that the company is setting a trap for them.
It was originally a good thing, but it turned out to be ineffective.
"Therefore, the mobilization meeting is an essential process. After the mobilization meeting, a certain period of time is left for the intended incentive recipients to digest and consider. If they have any questions and doubts, they can be raised and answered in a timely manner. The relevant agreements will follow.
Signing, changes at the industrial and commercial level, these are not so important."
Wen Jue said a lot in one breath, then paused, as if waiting for the two people's questions.
"We won't discuss the specific operations of each branch for now. We will discuss it together in surveys and meetings at that time. I just want to ask, what do you think is the appropriate proportion of this equity incentive amount?"
Gu Yun turned his head and asked.
"The quantity you asked is mainly divided into two aspects to determine the quantity. One is the total amount of the company's equity incentives. The core need to consider the number of batches of incentives and the reserved quantity."
"The second is the number of incentive objects for equity incentives, that is, the amount of incentive that each incentive object can receive. According to the 28/20 theorem, core objects are focused on incentives to truly achieve fairness in incentives and avoid the phenomenon of eating from the same pot or free riding."
"In short, the determination of quantity is a two-way process, which is related to the effectiveness of equity incentives and success or failure."
After two months of hands-on teaching and case studies from major companies with senior investor Wen Qingshan, Wen Jue, who had just taken charge of a company, finally understood this aspect thoroughly.
"As for specific numbers, there are two methods. It depends on which one you want to use."
Wen Jue turned to look at Gu Yun with a smile and continued.
"First, the total amount of equity incentives is determined based on the company's own characteristics, current valuation level, founder's sharing spirit, incentive level of competitors, and other factors. The usual ratio in the industry is 10-30%."
"The second is to use the total salary level of employees as the base to determine the total amount of equity incentives. The total value of equity incentives = total annual salary expenditure x coefficient, where the coefficient is determined by the industry and its own situation. Use this method that is linked to the overall salary level of employees
The method, on the one hand, provides greater flexibility, and at the same time ensures that the total amount of incentives is expanded in tandem with the company's development."
Gu Yun was convinced now.
He has never been very good at management. Half of it depends on his feeling and the other half of his powerful prophetic ability to win over a large number of talented people with outstanding abilities.
Fortunately, he had a second-generation financial person like Wen Jue by his side to advise and someone he trusted immensely, otherwise he wouldn't have known where to hire experts in this field.
"Also, is there an exit mechanism? For example, if an employee has worked hard to get equity in the company, but he no longer wants to play and plans to retire, what should I say?"
This is an age of dreams, and it is rare to be able to lie down.
But Gu Yun, who traveled back from the future, was used to seeing rich men in later generations who just rested on their laurels and enjoyed their lives.
If the timeline is stretched out for a lifetime, it seems that such a life is not bad.
At least you don't have to work your whole life. You've made enough money, but you've lost the opportunity to enjoy it.
"there must be."
Wen Jue nodded and added.
"The formulation and implementation of equity incentive plans is not a one-time event. It requires specialized agencies or personnel to continuously improve the plans and systems."
"Everyone says that it is easy to acquire shares but difficult to withdraw shares, so we have set up an equity management agency internally and formulated equity management methods. When equity changes occur, we will operate according to the equity management methods to safely realize the equity transfer and withdrawal of share holders, and dissuade everyone from doing so.
concerns."
Regarding this point, Wen Jue is the inventor of the new era coffee justice assessment system.
When Gu Yun took charge of Coffee Justice, the assessment system was lax and loose, but it has been supplemented and rectified since she took office.
Gu Yun is a person who came back from the Great Depression and has a natural empathy for fishing and lying down.
If you lie on the wind, you are like a pig that can fly. If you follow me, you can make money no matter what. If you don’t work hard, you will just make more and less.
But Wen Jue also believed that hard work could change everything. After becoming the chairman, her tolerance for groping was far less than that of Gu Yun.
After all, without an assessment system, it is impossible to quantitatively identify who is eating from the big pot, and the ability cannot keep up with the development of the company and the team.
With an incentive plan and an assessment system in place, only through a certain period of assessment results can the company be provided with the proposed incentive targets who are not qualified for the job, and then adjust or withdraw equity incentives.
"The exit mechanism must be detailed to avoid loss of both human and financial resources and avoid legal disputes."
Gu Yun said the last thing.
The three of them chatted all morning, and at noon, Wen Jue was left to have a meal in the cafeteria.
"If you have free time recently, you and Xuanxuan can go for a walk together and chat with the heads of each subsidiary to see what everyone thinks."
This was the first time that Gu Yun brought other girls to the cafeteria of the Paradise Building during meal time. Even though the employees below were not at the same table as the boss, they also looked at her sideways.
Although many people know that this incredibly beautiful girl is the righteous female boss of the coffee shop next door, there are also many newcomers who don't understand the relationship between Wen Ju and the big boss.
"Aren't you going? This is money from your wallet. You don't care about it. Don't feel bad when the time comes."
Wen Jue gave his lover a piece of mutton and asked with a smile.
"It doesn't matter, it's just a little less income. I've heard it said since I was a child that the key is to retain talents. As long as I am the controlling shareholder, it doesn't make any difference whether I make more money or less."
Gu Yun shrugged. In the past, he always felt that Brother Ma was pretentious when talking. What do you mean that I don't care about money?
But if you are not in that position, you will never know what it feels like to not care about money.
