- Xpeng CEO He Xiaopeng can unlock the full award if the company's Hong Kong-traded share price rises to HK$750 from the current HK$89.55 within 10 years.
- The total value of the proposed grant is about HK$2.55 billion ($328 million) based on today's closing price.
Xpeng (NYSE: XPEV) plans to grant more than 28.5 million shares to its chairman and CEO He Xiaopeng, but set conditions related to share price performance.
The electric vehicle (EV) maker announced the plan to grant Mr. He a total of 28,506,786 shares at a purchase price of zero in a Hong Kong stock exchange announcement today.
The total value of the grant is about HK$2.55 billion ($328 million), based on Xpeng's closing price of HK$89.55 per share in Hong Kong today.
Mr. He can only unlock these awards if he leads Xpeng to reach set share price targets within 10 years.
One-third of the grant, or 9,502,262 shares, will be unlocked if the arithmetic average of Xpeng's closing share price traded in Hong Kong reaches HK$250 for any 30 consecutive trading days.
An additional one-third will be unlocked if such average share price reaches HK$500, and the remaining one-third will be unlocked when the average share price reaches HK$750.
If Mr. He does not meet any performance targets by March 18, 2035, the grant will automatically expire.
Since joining Xpeng in January 2015 and assuming the role of chairman and CEO since August 2017, Mr. He has been responsible for the overall strategic planning and business operation decisions of the group, according to the announcement.
Xpeng's long-term development and requires a strong leader who is committed to guiding its overall strategic planning and development, as well as leading the management in the implementation of its medium to long-term business strategies and the achievement of various corporate objectives, the announcement said.
Mr. He's leadership is expected to enhance the enterprise value of Xpeng, thereby benefiting the company and all its shareholders as a whole, the announcement said.
The proposed grant is intended to provide incentives for Mr. He's dedication and leadership in the development of the group's business by further aligning Xpeng's interests with those of Mr. He, it said.
This 2025 share incentive plan is subject to Xpeng shareholders' approval, the announcement noted.
As of March 31, 2024, Mr. He held 4,400,000 class A shares of Xpeng, representing 0.3 percent of all class A shares and 0.1 percent of the voting rights, according to its 2023 annual report.
He also owns all 348,708,257 class B shares, representing 18.48 percent of all outstanding shares of Xpeng, with 69.5 percent of the voting power.
On August 26, 2024, Xpeng said in an announcement of the Hong Kong Stock Exchange that Mr. He had purchased a total of 1,000,000 class A ordinary shares of the company in the Hong Kong stock market on August 21-23 at an average price of HK$27.13 per class A ordinary share.
At that time, Mr. He also purchased a total of 1,419,922 American Depositary Shares (ADSs) of Xpeng through Galaxy Dynasty Limited, a company wholly owned by him, at an average price of $7.02 per ADS.
Xpeng's Hong Kong-traded shares have seen a sharp rebound this year, up about 100 percent year-to-date by today's close.
($1 = HK$7.7704).
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