(Yicai Global) June 8 -- Guotai Junan Securities became the first Chinese mainland-listed brokerage to introduce an equity incentive plan in which it will repurchase up to CNY2.17 billion (USD306.4 million) worth of its stock to use as employee incentives. It will pay a large premium over market price in the buyback.

The company, among the largest of its kind in China, will take from 44.5 million to 89 million of its domestically traded A-shares shares for up to CNY24.39 (USD3.40) apiece, about 150 percent above the CNY15.96 at which the Shanghai-based firm’s stock closed on June 5, per a statement it released yesterday. The scheme, which changes in China’s Securities Law now allow, is expected to cost up to CNY2.17 billion based on the number of shares it plans to repurchase and their price.

Its stock [SHA:601211] was trading 1.50 percent higher at CNY16.19 (USD2.28) this morning.

The company plans to hand 451 senior executives and other key employees -- 2.96 percent of its headcount -- about 1 percent of its total shares to spur their motivation, stir their creativity and stop a brain drain, it said.

Guotai Junan Securities had CNY559.31 billion in assets as of Dec. 31, up 28.07 percent from the end of 2018, and net assets attributable to its owner grew 11.38 percent from 2018's end to CNY137.5 billion, per its annual report for last year. The firm took in CNY29.95 billion in operating revenue in a yearly 31.83 percent gain, with net profit attributable to its parent up 28.76 percent on the year at CNY8.64 billion.

The old law barred China's securities firms from owning, buying and selling their own stock. The revision effective March 1 lets them do so for staff stock ownership plans.

Editor: Ben Armour