Equity-based compensation for new-economy companies

Equity-based compensation for new-economy companies

A look at how the increase in new-economy companies in Hong Kong is changing equity-based compensation

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Equity-based compensation has long been used as a tool to attract, retain and motivate key employees and management. With the increase in new-economy companies in Hong Kong, how is equity-based compensation changing?

Equity-based awards issued to employees by Hong Kong companies have historically revolved around traditional awards such as share options and the award/purchase of shares. The proliferation of new-economy companies and professional investors backing these companies have resulted in a growing appetite for alternative arrangements, which align employee and shareholder interests, while managing dilution of control. Given the new listing regime in Hong Kong, KPMG China expects to see this trend continue.

This document looks at equity-based compensation from various angles, including the tax and accounting perspectives, as well as the opportunities and potential risks.  

© 2024 KPMG Huazhen LLP, a People's Republic of China partnership, KPMG Advisory (China) Limited, a limited liability company in Chinese Mainland, KPMG, a Macau (SAR) partnership, and KPMG, a Hong Kong (SAR) partnership, are member firms of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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