Adoption of employee share plans rise over 10% amongst HKEX listing companies

In 2023, 68.5% of companies adopted employee share plans before their IPO, compared to 57.3% in 2013

The adoption of employee share plans among companies listing on the Hong Kong Stock Exchange (HKEX) has increased significantly over the past decade, Computershare said.

In 2023, 68.5% of companies adopted employee share plans before their IPO, compared to 57.3% in 2013, reflecting a rise of over 10%.

Whilst share options schemes were historically the preferred choice, the report revealed a notable shift in 2023, with companies favouring share awards as the preferred method for employee incentives.

The IT sector led in adopting employee share plans, with 82.3% of companies implementing such plans before listing between 2021 and 2023. The healthcare sector followed closely at 81.3%, and consumer discretionary companies ranked third at 75.3%.

Computershare also noted that share-based compensation plays a significant role in certain industries.

In 2023, share-based compensation accounted for 42% of total remuneration for key management personnel in the healthcare sector, the highest proportion among all industries.