Current Status of Ruixing Coffee Ruixing implements equity incentive plan for directors and employees

Since Luckin Coffee's financial fraud of 2.2 billion yuan, Luckin Coffee's board of directors has fallen into an "infighting" dispute, senior management has also undergone a large-scale change of blood, and Luckin Coffee, who has lost faith, has been "squeezed out" by the outside world. Luckin Coffee still did not give up "self-help."

Industry experts put forward: "Luckin Coffee is, after all, a legal entity, and if all the responsible executives of the company are replaced in the future, and the company can produce sustained profit growth, or there are new conditions to meet the conditions for listing, we do not rule out its re-listing."

Luckin Coffee said on January 26th that the "2021 Equity incentive Plan" will be implemented, with a maximum of 223 million Class A common shares awarded to employees and directors.

Luckin Coffee announced in FORM 6murK filing with the Securities and Exchange Commission (SEC) that the 2021 Equity incentive Plan will be implemented to retain, attract and motivate employees and directors by providing equity to them.

According to the Baidu encyclopedia explanation:

The meaning of "equity incentive plan" refers to a kind of incentive system that enables operators to obtain a certain amount of equity in the company, so that they can enjoy the economic benefits and rights brought by equity, and participate in corporate decision-making, share profits and bear risks as shareholders, so as to encourage them to diligently and dutifully serve the long-term development of the company. This is also one of the methods of human resource allocation to attract special talents and professionals.

Luckin Coffee also said that the 2021 equity incentive plan has a duration of 10 years and rewards up to 222769232 Class A common shares to employees and directors, equivalent to 27846154 American depositary shares (ADS). Luckin Coffee may grant options, restricted stocks, restricted stock units and other forms of awards under the 2021 equity incentive plan.

On December 17, 2020, Luckin Coffee announced that he would pay 180 million US dollars (1.175 billion yuan) to settle accounting fraud charges brought against him by the Securities and Exchange Commission (SEC).

According to other relevant media reports, Luckin Coffee's class action case in the United States has appointed the lead plaintiff and law firm. In the view of some people in the industry, the impact of Luckin Coffee's financial fraud will last for at least two to three years. In addition, Luckin Coffee announced last week that he had received notice from the "Company Joint liquidator" (JPL) that the second GPL report submitted to the Grand Court of the Cayman Islands would be circulated on January 29th, 2021. Later than January 15th, which was previously announced.

It is worth noting that on January 18, Luckin Coffee also released a recruitment plan for new retail partners on platforms such as the official Wechat account, which also means that Lucky will speed up shop opening and increase the layout of the sinking market. As for why it was reopened to join, Luckin Coffee said: hope to regain the trust of investors with better data performance.

Obviously, Luckin Coffee is still trying his best to make up for his mistakes.

So, can Luckin Coffee retain people by implementing an equity incentive plan?

* Image source: Internet