What is the detail of ESOP program?
What is the percentage of free float?
How many shares outstanding?
On what stock exchange is AIS traded and what is the stock symbol?
Does ESOP program cause sales of AIS shares by the company’s directors and management?
What is the practice of exercising options under ESOP?
The Company established an Employee Stock Option Plan (ESOP) program as a way to retain, motivate and reward the
Company’s directors and employees to the Company’s best benefit.
So far, shareholders have approved five grants of ESOP, all of which have been allotted. Options in each grant can be vested
in three-year period – one third each year after the first anniversary but options’ life is 5 years. Altogether, ESOP of the five
grants will translate into approximately 1.8% common shares (51,400,000 options) of company’s outstanding shares.
For more information on ESOP, please visit the section “Remuneration for Directors and Management” under the “Corporate
Governance” menu, or click here.
There are 2,952.725 million shares outstanding, as of 30 September 2006. For the top 10 shareholder lists, please visit
"Corporate Overview." on the main menu or click here.
AIS stock is traded on the Stock Exchange of Thailand (SET) since November 1991, symbol is “Advanc”. In addition, we have ADRs traded on the New York Stock Exchange. The CUSIP number is 00753G103.
The regular reports on sales of Advanc shares by the company’s directors and management are mainly the result of ESOP.
However, management can virtually sell shares only 8 months a year as it is the company’s code of conduct that prohibits
management from trading of company’s securities in the one-month period prior to the disclosure of financial information to
the public in each quarter.
For more information on trading of company’s securities, please visit the section “Disclosure of Information and Transparency”
under the “Corporate Governance” menu, or click here.
Under Thai regulations, the ESOP has many differences from what most people have experienced in other countries. The key
- One needs to put up cash to exercise the option. Unlike many foreign companies that basically give away shares (not
options) to employees as part of bonus, Thai companies give only options. Company provides no finance for exercising the
- Income tax need to be paid once options are exercised. Most of the executives fall into 30% to 37% tax bracket.
For example, one executive was allocated options at Bt48 per share (average of 30 days before shareholders’ approval).
He exercised one option when share price at Bt93 per share. He needs to pay to AIS Bt48. Moreover, the executive will need to pay tax upfront at 37%, for example, of the profit (93 – 48) x 37% or Bt16.65. Therefore, for each option that is well in the money, the executive would need to pay upfront Bt48+Bt16.65 = Bt64.65 per share, almost 70% of the share price.
From the structure described above, to hold the whole options and exercise in one shot or to hold the shares obtained from
ESOP and sell in one shot obviously requires sizable funding and tax payment.