Widespread adoption of share incentive schemes represents a move towards 'a more diversified incentive framework'
More employers in Hong Kong are offering share incentive schemes to mark a "more diversified incentive framework" in the financial hub, according to a new report.
Findings from a recent Computershare report revealed that 84% of companies listed on the Hong Kong Stock Exchange are now offering employee share plans.
"This widespread adoption indicates a structural shift in total compensation design toward a more diversified incentive framework," said Jennifer Sun, head of computershare plan managers, Asia.
"This evolution aims to foster employee ownership, talent engagement, reinforce long-term alignment with company value, and enhance employee retention."
The increase follows a major surge between 2015 and 2019 amid increasing demand for equity-based incentives and a favourable regulatory environment, according to the report.
The last five years have also shown a "relatively steady growth rate" in share plan adoption among Hong Kong employers.
Share plans offered in Hong Kong
Share option schemes are the most popular employee share plans in Hong Kong, with 76.4% of organisations offering the measure.
But the report noted that a growing number of employers are also starting to offer share awards, with 27% of organisations now offering the scheme.
"This growing emphasis on share awards provides insight into a strategic pivot by Hong Kong-listed companies reflecting a broader shift in corporate incentive structures aligning to a more balanced, retention-focused equity structure," the report read.
Why offer share incentive schemes?
Share options require employees to pay a predetermined exercise price to acquire shares, while share awards offer employees a clear and immediate value, according to the report.
"Larger, more established companies are showing trends in adopting both share options and share award," it read. "By offering a mix of both, companies can support broader employee incentive goals."
These goals include aligning employee interests with the company's long-term success, as well as attracting and retaining diverse talent.
"Offering both options and awards allows companies to cater to a wider pool of talent from executives to entry-level while matching different employees' preferences and market expectations," the report read.
Sun said their findings indicate that share incentive schemes have evolved from a supplementary offering to become a core component of corporate strategy in Hong Kong firms.
"Today, they serve as powerful tools for driving long-term growth and talent engagement," Sun said.
