The combined market capitalisation of the two companies listed on the Warsaw Stock Exchange is over PLN 2.3 billion. Paweł Przewięźlikowski holds 27.19% of shares in each of the companies, and has decided to donate 25% of each holding to the companies free of charge, in order to launch an incentive programme for employees.
This unprecedented decision has sparked a wave of enthusiasm, which is hardly surprising. However, aside from appreciating the idea itself, it is worth studying the details of the structure of such unusual incentive programmes. The details can be found in the draft resolutions of the general meetings of Selvita and Ryvu. They will be as follows:
- The incentive programmes of Selvita and Ryvu are based on existing shares. Thus, the implementation of these programmes does not involve the issue of new shares and does not result in the dilution of existing shareholders. The holding in each company owned by Paweł Przewięźlikowski will decrease by 25% and he will be replaced by employees covered by the programme. Therefore, the shareholding structure will change.
- The company will be an intermediary of sorts. It will acquire shares from Paweł Przewięźlikowski, who will be the sponsor of both programmes, and then sell them to employees. The shares from the sponsor will go to the employees through the company.
- The company will acquire its own fully paid-up shares free of charge. This will occur as an exception to the prohibition on the acquisition of a company’s own shares (Article 362 § 1 item 7 of the Code of Commercial Companies). The transfer of shares to the company will be made on the basis of agreements between the company and the sponsor, which will be concluded gradually as the programme is being implemented. Such acquisition will not burden the company and it will not require the creation of any reserve capital. The only condition is to find a willing and generous sponsor!
- The company will acquire the shares free of charge and sell them to employees at a preferential price, which will be calculated so as to cover the costs of the programme. So in purchasing shares, the employees will only cover the costs that the company will incur in connection with the programme. Under no circumstances, however, will the price be higher than PLN 1. The prices will be extremely preferential, as the current (23.04.2021) share prices are: Selvita – PLN 78.00 and Ryvu – PLN 49.90.
- Eligible employees will be designated by Paweł Przewięźlikowski. The lists of those eligible will be approved by the Management Board, and the lists of eligible members of the Management Board will be approved by the Supervisory Board.
- Each eligible person will enter into an agreement with the company on participation in the programme. The agreement will specify the rights and obligations of the parties and, above all, it will form the basis for the acquisition of shares by the employee.
- The transferability of the shares acquired by the employees under the programme will be temporarily restricted. The employee will be obliged not to dispose of the shares granted to them within the period indicated in the agreement, being no less than 12 months and no longer than 36 months from the date of acquisition of the shares.
Detailed solutions will be defined in the rules of the programmes. A guide on how to implement such an incentive programme already exists. Other companies would only need to copy it, which I strongly recommend.