45 Listed Companies Completed Implementation of Employee Stock Ownership Plans in the Year

Securities Daily Reporter Gui Xiaosun

Data from Tonghuashun shows that as of March 17, a total of 45 listed companies have disclosed announcements of employee stock ownership plan implementations this year, compared to only 19 companies during the same period last year.

“Intensified talent competition is the core driving force. In new energy, technological innovation, and other fields, employee stock ownership plans have become key tools for companies to retain core personnel and build a strong talent moat,” said Liu Youhua, Research Director at Qianhai PaiPaiWang Fund Sales Co., Ltd., in an interview with Securities Daily. “Economic cycles and corporate transformation needs are important catalysts. During the economic recovery phase, companies need internal teams to stay stable and deeply aligned with long-term interests. At the same time, facing strategic transformation across multiple industries, employee stock ownership plans with broad coverage and clear long-term incentive effects better meet the practical needs of pushing teams to fully commit to new tracks and achieve strategic goals. The significant increase in companies implementing employee stock ownership plans by 2026 is the result of multiple factors working together.”

By comparing the announcement dates of preplans, shareholder meeting notices, and implementation completion dates for these 45 companies, some companies have gone from preplan announcement to implementation in just over a month, while others have taken several years from plan announcement to execution.

Among the 45 companies implementing employee stock ownership plans this year, all sources of shares are indicated as “purchased on the secondary market (including block trades).” Liu Youhua told reporters that in 2025, listed companies conducted intensive share buybacks, accumulating sufficient stock inventory, which provided low-cost, non-dilutive share sources for implementing employee stock ownership plans.

Reviewing previous announcements from listed companies shows that most companies, when launching share repurchase plans, also mentioned that future repurchased shares would be used for employee stock ownership plans or equity incentives. For example, Qingniao Fire Protection Co., Ltd. announced that, based on confidence in the company’s future development and recognition of its long-term value, to boost investor confidence and protect the interests of shareholders, the company plans to use its own funds and raised funds to repurchase shares through centralized bidding transactions. When appropriate in the future, these repurchased shares will be used for employee stock ownership plans or equity incentives to further improve corporate governance, establish a long-term incentive and restraint mechanism, and fully motivate employees, effectively aligning shareholder interests, company interests, and the personal interests of core teams.

“Compared to traditional equity incentives, employee stock ownership plans cover a broader scope. They can extend from senior management to core grassroots staff in R&D, operations, and other departments, achieving benefits across the entire business chain. Additionally, the benefits are more deeply aligned, with more proactive incentives, and more flexible lock-up periods and assessment conditions. Moreover, employees are required to make active contributions by subscribing with their own funds, which brings a stronger sense of identity and ownership, and better stimulates team initiative,” Liu Youhua told reporters.

Data shows that participation in these 45 companies’ employee stock ownership plans ranges from hundreds to tens of thousands of employees.

Yuan Huaming, General Manager of Guangdong Huahui Chuangfu Investment Management Co., Ltd., told Securities Daily that employee stock ownership plans tie employees’ long-term development to that of the company, helping to build corporate culture and enhance cohesion. Since employees need to contribute their own funds, the financial pressure on the company is minimal. Moreover, employee stock ownership plans have low thresholds and more equitable distribution. “Employee stock ownership opportunities are available to all or most employees; in contrast, equity incentives are often only given to senior management and a few core employees. If the company performs well, ordinary employees participating in the plan can share in the company’s growth dividends.”