What's wrong with me being a rich man?

Chapter 592 Incentive

Yu Xing really wanted to encourage Li Song not to give up his short-selling business, but he didn't really have a good angle to persuade him. Instead, he was more looking forward to seeing how Li Song would criticize Guo Shanfeng and cheer him on.

Anyway, having something to do is better than having nothing to do.

The failure of the long-term cooperation between Silicon Carbon Group and German company Wibac has led the company, which was already planning to switch to domestically produced air suspension, to reconsider its decision and will use Konghui Technology's products in the facelifted model in the third quarter of next year.

Regarding the warranty period provided by Kong Hui, Yu Xing had communicated with him during the Shanghai Auto Show and received final confirmation in a recent exchange: the facelifted air suspension will have a lifetime warranty.

In the last week of August, Silicon Carbon Group has already planned the launch of its models for Q3 next year. On the one hand, there will be minor facelifts of existing Kyushu models, and on the other hand, a standard five-seater model will be launched, with configuration and price likely to be between the Pro and Max models.

Excluding subsidies, the Kyushu Pro is priced at 34.58 yuan, the Kyushu Max at 38.58 yuan, and the five-seater model is expected to be priced at 36.58 yuan. If the subsidy trend continues next year, the final price including insurance will be around 33 yuan.

This is definitely in the 30+ price range. Of course, compared to its competitors, it still has competitive materials and features.

Six-seater models cater to more specific family needs, while five-seater models aim to leverage the stimulus of new energy policies to extend the brand's growing acceptance among families to more mainstream models.

There is still debate within the silicon carbide community regarding this positioning.

One side argues that the five-seater should be brought down to the same price point as the Pro model, because relatively speaking, families with multiple children who are willing to choose the six-seater have stronger economic strength, while the five-seater, which targets a larger group, needs to take into account people's sensitivity to budget.

The other side argues that the mid-range price, coupled with features like air suspension and rear-wheel steering, still makes it highly competitive and can better attract potential consumers who are already interested.

There is still a considerable amount of time before the final pricing is determined. Yu Xing believes that this discussion can incorporate more authentic feedback from frontline workers and car owners, but he is quite satisfied with the performance of the newly released five-seater prototype.

Although Kyushu's six-seater model tries its best to squeeze out as much space as possible from the third row, it is still more suitable for shorter passengers, while the five-seater model is truly comfortable in both the front and back.

The five-seater model needs further optimization. There are indeed different opinions on its positioning within the company, but unlike Kyushu's debut, everyone generally feels more confident.

With the end of August, Silicon Carbon Group has completed the internal level refinement and adjustment of the company's listing work, clarifying the stock options to be issued to all employees before the listing, as well as the subsequent employee equity incentive plan.

Silicon Carbon Group established an option pool from the very beginning. As of the Series C financing, the option pool totaled 6.258% of the equity. After deducting the 2.158% that was already tied to senior management and R&D, the remaining 4.1% was still available.

This stock option distribution is mainly aimed at middle and lower-level employees, with 2.5% to be distributed and 1.6% reserved for stock option rewards for new employees in the future.

In May of this year, the number of employees at Silicon Carbon Group exceeded 11,000. Even according to Goldman Sachs' conservative market value estimate, the 2.5% option in this round is worth 13.2 billion RMB.

Although these stock options are granted in a one-time grant before the IPO, employees must wait four years to vest. After one year of service, they receive 25% of the equity, which they can choose to exercise at 80% of the agreed-upon offering price or continue holding. The remaining 75% will unlock quarterly over the next three years, accumulating to 100% vest after four years. If an employee leaves the company, those already vested options have a three-month vesting window, while unvested options automatically expire and return to the option pool for future incentive purposes.

Such stock option rewards not only give everyone a sense of certainty about long-term returns, but also prevent them from being cashed out and leaving in the short term. As for incentives for new employees, the reserved 1.6% of options will be combined with the additional shares issued after the listing to balance flexibility and stability.

In addition, this time, the carbon silicon group mainly targets the middle and lower levels of the general incentive program. In particular, considering the situation of the grassroots workshop employees, they are allowed to use future dividends to offset the exercise funds, reducing cash pressure. Alternatively, the company can provide special loans to be repaid with their future stock income. Or, the securities firm can provide a one-stop service of exercising and selling the options, allowing the securities firm to exercise the options first and then sell them, finally deducting the exercise costs and transferring the profits to the employees, which is equivalent to exercising the options at zero cost.

Yu Xing's original intention was to ensure that everyone in the company could benefit from the development and to motivate everyone to work together. After all, the option to exercise the option was at 8% of the issue price, and the higher the company's future stock price, the greater the potential profit.

Assuming the offering price is $10 and the exercise price is $8, and the price rises to $30 after four years, with an average option value of $12 per person, the exercise capital would be $9.6. Maintaining the offering price would yield a profit of $2.4, and a share price of $30 would yield a profit of $26.4.

Regarding the possibility of a stock price decline, if it falls below the exercise price, the company will adjust the exercise price or issue free RSU shares to compensate for the loss.

Simply put, the better the company, the higher the stock price, and the greater the returns.

Carbon Silicon Kyushu has performed very well in the market. Since everyone has treated Carbon Silicon well, Carbon Silicon should naturally treat everyone well in return.

With such a pre-IPO stock option incentive plan, the company was encouraged by the potential benefits for its employees and pleased by the further confirmation of the IPO news. As for the newly divided job levels from A to I... there was not much reaction overall.

Silicon Carbon's original job structure had only five levels, but with the rapid growth of its workforce, it has now expanded to nine levels, with each level further divided into higher and lower levels: T1, T2, and T3.

For example, Vice President Cui Zhiyu is a B-level T1, and his related benefits are also linked to his job level.

The news that Silicon Carbon Group is gradually clearing up preparations and adjustments before its IPO has been circulating on social media, surprising many in the industry with its speed in rushing to go public.

If it can truly succeed in its sprint, it will undoubtedly gain the title of "first new energy vehicle" and "first new energy stock" in addition to "first new energy vehicle".

Yu Xing did not respond to media phone interviews, stating that he still needs to continue to advance this work, and that he will formally sign a memorandum of understanding with Zhejiang Province for the new factory in mid-September.

Whether it's the record-high performance in August, the recent listing news, or the already announced new factory construction, Silicon Carbon Group is sending a strong signal to the industry through a series of actions that it is accelerating its layout and development.

Regardless of how the industry views the Silicon Carbon Group, and regardless of how the market evaluates Six Nine Provinces, the impact of new energy from Lingang has already outlined a clear storm.

(End of this chapter)