Share option adoption doubles, share awards quintuple in decade

Healthcare (58.7%) and IT (46.6%) sectors lead in share award adoption. 

In the last ten years, the adoption of Share Option schemes has doubled, whilst Share Award schemes have increased over five times, indicating a growing preference for Share Awards, Computershare reported.

For Hong Kong-listed companies, share options and share awards are used in different ways by small and larger organisations.

Share options are common in smaller firms, whilst larger companies favour share awards because emerging companies with tight cash flows use share options to draw talent, incentivising employees to boost the company's value and potential earnings.

Meanwhile, larger companies use share options to drive growth by aligning awards with the organisation’s performance.

Larger companies usually offer a mix of share options and share awards, catering to their diverse employee base across different levels of seniority. Doing so enables them to tailor share plans for specific groups, aligning with their strategic goals.

Industry-wise, share plan preferences differ, with healthcare and information technology (IT) sectors leading in share award adoption at rates of 58.7% and 46.6%, respectively.

Meanwhile, share options continue to outpace share awards across all industries, with conglomerates and consumer discretionary having the highest adoption rates of 88% and 85.8%, respectively.

In terms of investment, the IT sector has invested the most in share schemes, totalling $38.5b followed by healthcare with $11.5b, and consumer discretionary with $9.7b.

However, the data found that the IT sector invests low amounts on share plans while the healthcare sector invests higher amounts.