Airline operator ANA Holdings is planning to offer approximately $60 million worth of shares to thousands of its employees. The move comes amidst a severe labor shortage in Japan and a regulatory request for companies to improve share price performance. ANA will provide 100 shares, valued at around $20 each, to about 70% of its nearly 45,000 employees in November.
ANA is following the example set by other major Japanese companies such as Omron and Sony Group, which have also implemented employee share incentive plans. According to data from Nomura Securities, the number of Japanese companies offering equity-based compensation to employees has doubled in the last five years, with 966 companies now providing such incentives.
By offering shares to employees, companies aim to increase commitment, effectiveness, and earnings, ultimately improving stock performance. The Tokyo Stock Exchange has called on listed firms to be more conscious of their share prices as many companies are trading below their book value. The market views stock incentives positively, as higher stock prices directly boost such incentives.
ANA employees will need to hold onto their shares for three years before they can sell or transfer them. The stock incentives are intended to increase engagement with employees and promote their interest in raising corporate value. The introduction of stock incentives in Japan was encouraged by former Prime Minister Shinzo Abe’s corporate governance reforms.
Although employee stock incentives have gained popularity, only a quarter of the top 100 Japanese companies currently offer them, compared to over 80% in the United States and Germany. The limited adoption is attributed to labor laws that require wages to be paid in currency. Legal flexibility would facilitate the wider implementation of stock incentives.
Overall, ANA Holdings’ decision to offer shares to employees aligns with the growing trend in Japan of using employee share incentives to retain talent, improve stock performance, and raise corporate value.
Sources:
– Reuters – TOKYO, Sept 20 (Reuters) – Airline operator ANA Holdings (9202.T) plans to offer…
