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MindMap Gallery Top-level design and equity incentives

Top-level design and equity incentives

This is a mind map about top-level design and equity incentives, including the company's control rights design, equity layout, equity incentives, equity cooperation, etc.

Edited at 2024-01-15 09:48:12

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Top-level design and equity incentives

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Outline

A book sees through the equity structure
- 16
- 1
Mason·Carter

Top-level design and equity incentives Liang Hui

Company control design

Partner mechanism design

What makes a good team?

There must be a leader

strategy execution

The founding team must not exceed 3 people

There must be a leader. Two cows: the boss and the second child.

worship

trust

Standardize

Keep an equity pool

Personality compatibility

Partners enter

Principle: Who creates value, who distributes benefits

Financial resources driven-physical capital model 80%

People-driven-human capital model 20%

How to confirm founder’s worth

Initial (100 shares per capita) Convener (increase by 5) Entrepreneurship point and execution (increase by 5) First step (increase by 5-25) CEO (increase by 5) Full-time (increase by 200) Credibility (increase by 50-500) Industry characteristics

Technology investment requires dedicated project investment

Partner adjustment mechanism

Cash in installments

Realize part of the equity

A 70% B 30% implementation of each half

Subtopic 2

Subtopic 3

internal motivation

Stablize

Equity incentives

unstable

Pay in installments

Absolute value Number of shares

unanimous agreement

Use architecture and try not to use protocols

Partners: Percent Discreet

Exit mechanism for partners

If you withdraw your shares, you won’t get your money back, and you won’t lose even if you lose.

lock-in period

Based on the actual situation of each industry

Valuation

to price

Investment 6-month fixed annualized rate

Reference investors: one-third, one-fifth

Book net assets

Of course quit

Loss of shareholders, death and reaching retirement age, revoking of business license, bankruptcy, cancellation of shareholder qualifications, inability to perform duties, termination of contract due to fault

Exit

Resigning voluntarily, handling equity without permission, violating company rules, dereliction of duty, committing fraud, causing significant losses to the company, prohibiting competition, breaking the law, failing job assessments, damaging the company's reputation or interests

Exit at expiration

Buyback method

Confirm and agree

One-time repurchase of the shares held and payment of 5-year dividends according to the previous year's dividend standard

The company repurchases 20% of the shares each time, and repurchases them year by year over five years. Shareholders are also entitled to enjoy dividend distribution based on the company's net profit of the previous year and the amount of equity held by each repurchase.

governance structure

Four keys: 1. Shareholding ratio of founding shareholders 2. Voting system of shareholders’ meeting, board of directors and board of supervisors 3. Nomination of chairman and general manager 4. Institutional arrangements for founding shareholders to repurchase shares held by investor shareholders or management shareholders

Design of the company’s registered capital

1. Bigger is not always better 2. Be wary of investment in non-monetary assets with unrealistic values 3. Investors’ capital premium is not equal to capital increase paid in

Design of company articles of association

1. Proportion of voting rights 2. Proportion of dividends 3. Capital contribution proportion, actual funds or installments, 4. Inheritance 5. Equity transfer 6. Shareholder withdrawal 7. Investment, guarantee 8. Shareholders’ meeting power 9. Chairman Gua Xing and director emergence Method 10. Powers of Chairman and Executive Director 11. Powers of General Manager 12. Capital increase ratio of legal representative: 100 X=10%

Equity core solves the relationship between six types of people

Founders: Addressing Control

Percentage of shares

Team in the same department: Solve business problems and provide effective motivation

Number of shares

Investors: Financing, Value

Upstream and downstream: stakeholders to a community of shared future

Virtual shares: debt replacement employee incentives: year-end bonus incentives

Peers: Can mergers and acquisitions be possible?

public shares

Secondary market

Who has the final say?

nine life lines

1. Absolute control line: 67% 2. Relative control line: 51% 3. Safety control line: 34% 4. Listed company tender offer line 30% 5. Major horizontal competition warning line: 20% 6. Temporary meeting rights: 10 % 7. Major equity change warning line 5% 8. Temporary proposal right: 3% 9. Subrogation right 1%

Three levels of control

shareholders meeting

Absolute controlling interest

veto power

Board of Directors

Right to nominate seats

AB shares: A shares have one vote, one share has one vote, and B shares have one vote. The right to re-elect the chairman of the board.

Management

Personnel management rights

Seven ways to divide shares without dividing rights

limited partnership

Boss: GP

Employee Incentive Equity Crowdfunding LP

pyramid architecture

persons acting in concert

proxy voting rights

preferred stock

AB shares

Company Articles of Association Design

Equity layout

The core of equity design: value

Equity Design: Two-wheel drive

Value: The value of the first-level platform is mainly

overall company value

Making money: Second-level platform business value is the main focus

Industrial chain integration

capital story

Where to put the future?

The origin of the brand story

regional expansion

technological innovation

Manufacturing retail

Small company, big group

Policy promotion

New Field

New product

Equity structure

Analysis on the value of feeding horses in separate troughs Long-termism

Where is the future?

Where are the people?

Where are the assets?

Where is the profit?

natural person direct structure

The risk is relatively high

limited partnership structure

Holding company structure

hybrid architecture

Overseas equity structure

Contractual architecture

Five-tier architecture

pyramid structure

Equity layout target structure chart

See picture

Corporate WeChat screenshot_16618471455002.png

Equity incentives

The nature of equity incentives

Responsibility system rather than profit sharing system

Principles of Equity Incentives

Begin with the end in mind

Misunderstandings about Equity Incentives

Shareholding system does not mean contracting system. Shareholding reform does not mean sharing money and not requiring small shareholders but small bosses.

Short term: dividends Medium term: appreciation Long term: value

Business goals: average of the first two years*0.9, exceeding 10 million segments, exceeding 50 million in increments

Equity incentive methods

Choice of equity model: five models

The total shares shall not exceed 5% and 30% of the transaction amount, and the price shall be fair.

Real shares

Agreed exit mechanism

stock futures

External partners: dividends and increments

options

Both parties require an agreement, an agreement

dry stocks

Cash type

Appreciation rights

(Business growth: 70% profit growth 30% 1) 17%

adjustment mechanism

trading enterprise

innovative enterprise

The Five Elements of Determining a Person

historical contribution

Identity characteristics

degree of correlation

Hard to replace

Difficulty in supervision

adjustment mechanism

Project Partner

business partner

Managing Partner

permanent partner

Five elements of timing

strategic planning period

Employee psychological expectations

Nature of the work

Industry characteristics

laws and regulations

adjustment mechanism

Assessment period Subject period Window period Lock-in period Exercise period Conversion to real shares Realization period

Accelerate or lengthen the excitation cycle

Five elements of pricing

net profit

Stablize

gross profit

Net assets

Unstable*2 times

revenue

High round increase *3 times

Investors and stock prices

Profit* multiple Fair price: 8-12 times Employees: 5-6 times Set strategy once every 3 years and change it once

adjustment mechanism

Share price

pay deposit

Five elements of quantification

Total amount This amount Individual amount

Equity structure

A certain ratio of incentives divided into three rounds

Number of people motivating

5% at the grassroots level, 20% at the middle level, 80% at the top level

incentive cost

0.8-1.5 times the annual salary of senior executives

Incentive intensity

Cake-cutting method: Job level: 38% step difference Job value: Core center support 10% Company age: 1.0-1.3

laws and regulations

adjustment mechanism

Performance rolling-performance trigger

With 10% of the total share capital, excess: 10% increase for every 2 times the number of shares

Incentives to spend money Incentives to not spend money Incentives to get money

Four levels of dynamic management of equity

Equity Transfer Agreement

Equity distribution is fair: static

Equity Incentives: Dynamic

dynamic meaning

When designing: supporting linkage

After Implementation: Dynamic Optimization

Equity operations: buying and selling

performance management

organizational structure

Payroll management

Capital operation

governance structure

Corporate Strategy

Basic business to make money

Virtual shares

Development business future

Equity opening

Opportunistic business projects

cooperate

Strategic three-way innovation

Upgraded

layered design

Fission type

Business Analysis Cross-Holdings

Cross-border

Venture capital mechanism

internal

Corporate Governance

shareholders meeting

Partner meeting

Board of Directors

strategy committee

The Audit Committee

Nomination Committee

Remuneration and Appraisal Committee

Equity Committee

Capital operation

Never listed

Mainly virtual stocks

Three new board

options

Planned IPO

Real shares with restrictions

Be acquired

Real shares/appreciation rights

Listed

Restricted stock/options/employee stock enhancement plan

Organization

Create chamfer structure

Execution type => Pull type

Establish business unit organization

Headquarters

Salary design

Salary level

Overlay type Substitution type

performance appraisal

The weight accounts for 40%

Take the three items with the highest equity in the monthly performance evaluation as the evaluation criteria, and make statistics at the end of each monthly evaluation.

The weight of stock reporting is 20%

Organize shareholder reports on the 10th of the next month of each quarter and provide mutual evaluation and scoring

Values weight 30%

Organize shareholder self-evaluation and mutual evaluation on the 20th of the next month of each quarter

Shareholder proposals weight 10%

Discuss on the 15th of the next month of each quarter and give each other scores.

Equity cooperation

Things to pay attention to in equity cooperation

funds

return profit points

Exit method

Value-added space

1. The ultimate goal of partner learning is to make the cake bigger and then divide the cake 2. Build a team, set strategies, and lead the team

Long lasting

minute increments

Select people

Share responsibilities