If the actual share price is greater than the specified price, the right can be driven. Of course, the right cannot be exercised. If the actual price is lower than the prescribed price, it cannot be exercised at all.

Equity incentive is an incentive way for managers to participate in enterprise decision-making, share profits and take risks as shareholders, so as to serve the long-term development of the company diligently and responsibly.

At present, stock option model, restricted stock model, stock appreciation rights model, performance stock incentive model and virtual stock model are the main stock incentive models.

The basic model of equity incentive:

(1) blue chip stocks

It means setting reasonable performance targets at the beginning of the year. If the incentive object reaches the predetermined target at the end of the year, the company will grant it a certain number of shares or withdraw a certain incentive fund to buy shares of the company. The circulation and realization of performance stocks are usually limited by time and quantity. Another long-term incentive method similar to performance stocks in operation and function is performance unit, which is different from performance stocks in that performance stocks are awarded to stocks, while performance units are awarded to cash.

(2) Stock options

Refers to a right granted by the company to the incentive object. The incentive object can buy a certain number of circulating shares of the company at a predetermined price within a specified time, or give up this right. The exercise of stock options also has time and quantity restrictions, and the incentive object needs to pay cash for the exercise itself. At present, the virtual stock option applied by some listed companies in China is a combination of virtual stock and stock option, that is, the company grants the incentive object the right to subscribe for virtual stock, and the incentive object obtains the virtual stock after exercising.

(3) Virtual stock

It refers to a kind of virtual stock granted by the company to the incentive object, according to which the incentive object can enjoy certain dividend rights and stock price appreciation income, but it has no ownership and voting rights, cannot be transferred and sold, and automatically becomes invalid when it leaves the enterprise.

(4) stock appreciation rights

Refers to a right granted by the company to the incentive object. If the company's share price rises, the incentive object can obtain the corresponding amount of share price appreciation income by exercising. The incentive object does not have to pay cash when exercising, but obtains cash or equivalent company shares after exercising.

(5) Restricted stock

It refers to granting a certain number of company shares to the incentive object in advance, but there are some special restrictions on the source and sale of shares. Generally, only when the incentive object completes a specific goal (such as turning losses into profits) can the incentive object sell restricted stocks and profit from them.

(6) Deferred payment

It refers to a package of salary and income plans designed by the company for the incentive object, part of which belongs to equity incentive income. Equity incentive income is not paid in the current year, but converted into shares according to the fair market value of the company's shares, and paid to the incentive object in the form of company shares or in cash according to the market value of the shares at that time after a certain period.

(7) Operator/employee shareholding

It refers to letting the incentive object hold a certain number of company shares, which will be given to the incentive object by the company free of charge, or purchased by the company with subsidies to the incentive object, or purchased by the incentive object at its own expense. The incentive object can benefit when the stock appreciates and suffer losses when the stock depreciates.

(8) Management/employee acquisition

It means that the management or all employees of the company use leveraged financing to buy shares of the company, become shareholders of the company, and share risks and benefits with other shareholders, thus changing the ownership structure, control structure and asset structure of the company and realizing shareholding operation.

(9) book value appreciation right

Specifically divided into two types: purchase type and virtual type. Purchase type means that the incentive object actually buys a certain number of company shares according to the net asset value per share at the beginning, and then sells them back to the company according to the net asset value per share at the end of the period. Virtual type means that the incentive object does not need to spend money at first, and the company grants the incentive object a certain number of nominal shares. At the end of the period, the income of the incentive object is calculated according to the increment of net assets per share and the nominal number of shares, and the cash is paid to the incentive object accordingly.

The first to eighth types mentioned above are equity incentive models related to the securities market. In these incentive models, the income of the incentive object is affected by the company's stock price. The book value appreciation right is an equity incentive model that has nothing to do with the securities market, and the income of the incentive object is only related to a financial index of the company-the net asset value per share, but not to the stock price.