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Xinyuan Real Estate Co., Ltd. Message Board

  • star_hominid star_hominid Nov 5, 2012 2:11 PM Flag

    Performance Options

    6.9 million options....with performance "likelihood" to be determined each quarter by the BOD. $2.42/ADS options in the money....should it be "more likely than not" that the performance criteria will be met.

    ***On December 13, 2010, under the 2007 Plan, the Company granted share options with performance condition to purchase up to 6,900,000 common shares to certain employees, at an exercise price equal to the price of the grant date (US$1.21 per share). These options have weighted average grant date fair values of US$0.60 to US$0.61 per option, depending on vesting period. These options have vesting periods of 25 to 37 months and will expire no later than December 13, 2020. The performance condition is determined by the Board of Directors. For those awards, an evaluation will be made each quarter as to the likelihood of performance criteria being met. Compensation expenses are then adjusted to reflect the number of shares expected to vest.***

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    • Those are weird critters. When is the "final" evaluation made on whether the individual employees passed their performance tests, at the time of vesting maybe?

    • If all these options become in the money and tie to compensation expense, XIN may miss estimate Friday.

      • 1 Reply to growth.value
      • I think the 156 million share number as of Nov 2 gives a hint to the number of shares to be used. XIN has always tried to be conservative with their estimates...and in fact they give $30-$33 million for net income estimates...not per share estimates. I believe they will met or beat their estimate. How much they beat the estimate doesn't matter much to me...because they are selling out a large number of projects. What they don't make in Q3...they will made in Q4.

        In the long run, whether XIN will trade at a P/E of 1.8 end of Q3 or P/E of 1.9 end of Q3 doesn't make much difference. Stock flippers will pump or bash whatever earnings turn out to be....but long term holders will make the big bucks.

        And if all those options are granted....XIN's performance will be fantastic...almost by definition.

 
XIN
3.02-0.20(-6.21%)Jul 1 4:06 PMEDT