VietNamNet Bridge - Big enterprises have been following in each others’ footsteps in launching ESOP – employee stock ownership plans – to increase their capital, bring more benefits to shareholders and retain workers.

ESOP mushrooms

FPT, the biggest technology group in Vietnam, has just issued 1.35 million in ESOP issues to the 89 most outstanding workers in the group who made great contributions to the group’s business in 2012.

ESOP has become more familiar to Vietnamese, who understand that ESOP shares are sold at preferential prices to the outstanding workers, leadership, or to other workers under the specific programs which aim to specific purposes.

In early June 2013, Hung Vuong JSC announced it would offer to sell 1.2 million ESOP shares to the key personnel at the prices equal to the face value, which is equal to 25 percent of the current market price. ESOP would be a part of the program on issuing shares to increase the chartered capital.

Hung Vuong planned to issue 40.8 million shares to increase the chartered capital to VND1.2 trillion. Of this, 1.2 million shares would be issued to the key personnel.

The most remarkable ESOP deal is the one in which Masan Group sells 18 shares to 28 its workers. It plans to issue 20 million, or 2.9 percent of its shares as bonus shares to some outstanding workers.

With the current market price of VND110,000 per share, the 18 million ESOP shares sold at VND10,000 per share to the workers, having the market value of up to VND2 trillion.

The boards of directors of many other enterprises also presented the attractive ESOPs at the shareholders’ meeting earlier this year. ITA, for example, is going to issue 2 million shares in June 2013, SSO 1.2 million shares, ABT 500,000, STB 32 million, QNS 4.6 million, or 5 percent of total shares. VNM also planned an ESOP, but the plan has been rejected.

Most recently, Bourbon Tay Ninh on June 11 said it plans to issue 6.57 million ESOP shares, equal to 4.93 percent of shares in 2013 to the workers who have been working there for a long time.

As unclear as ESOP

In fact, there still exists two contradictory viewpoints about ESOP. And in the eyes of many investors, ESOP is something enigmatic and vague.

A worker of a listed company, when asked if he can buy ESOP shares, answered that he is not listed as eminent workers to be able to buy shares at the preferential prices. The worker also said no one knows about the criteria for someone to be listed as the eminent workers to be eligible for purchasing the shares.

Meanwhile, president of a company said he does not think of ESOP at this moment.

“If we issue ESOP shares now, the share issue may be not interested even by the middle class managers. This could be partially because of the workers’ financial capability. However, the main reason behind this is the indifference to the shares, the prices of which have fallen down dramatically over the last few years.

This could also be the reason when SCIC, the State Capital Investment Corporation, the biggest shareholder in Vinamilk (VNM) vetoed the ESOP suggested by the VNM’s board of management.

Manh Ha