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The information technology sector invests the most at HK$38.5bn, followed by the healthcare and consumer discretionary sectors.
The adoption of employee share schemes grew significantly over the past decade in Hong Kong, with 83.6% of listed companies now including an employee share plan as part of their remuneration strategy as of 2022 (a rise of 17.5% from 66.1% in 2012), according to the latest research by Computershare.
In the market, two types of share plans dominate:
- Share options – employees are given the choice to purchase shares in the future at a predetermined price on the grant date;
- Share awards – employees are given shares, usually at no cost, allowing them to become shareholders.
Among Hong Kong-listed companies, share options are prevalent among smaller companies, with share awards generally trending upwards as company size increases. This is mainly because newly listed companies that are in a growth phase with limited cash will often use share options to attract the talent they need to reach their goals.
Larger companies, on the other hand, generally have a more diversified range of schemes that include both share options and share awards, allowing them to adjust the share plan offering for specific employee populations to align with their strategic business objectives.
Across all industries, share options continue to outpace share awards, with the highest adoption rates in conglomerates at 88% and the consumer discretionary sector at 85.8%.
The healthcare and information technology sectors, both highly competitive for skilled and specialised professionals, showed the highest share award adoption rate as a way to attract and retain talent, with 58.7% and 46.6%.
Overall, the information technology sector invested the most in employee share schemes at HK$38.5bn, accounting for more than half (53.5%) of the total annual spend on employee share plans among Hong Kong-listed companies of HK$72bn.
Healthcare companies are the second largest investor in employee share plans at HK$11.5bn, followed by the consumer discretionary sector, or companies that offer non-essential goods and services, which invested HK$9.7bn.
The data in the 'Industry benchmark report: Employee share plans for Hong Kong-listed companies', is based on 2,597 companies listed on the HKEX. The data referring specifically to share plans is based on information from 2,172 companies listed on the HKEX that offer employee share schemes.
All images / Computershare
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