GGRAsia – Galaxy cancels share options of above-market exercise price

Galaxy cancels share options of above-market exercise price

Dec 31, 2024 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator Galaxy Entertainment Group Ltd has cancelled just under 26.79 million share options previously granted by the company between December 2019 and December 2023, when the exercise price of the firm’s stock was trading at a premium to Monday’s HKD32.85 (US$4.23) market level.

The earlier share options had been granted to three executive directors – including its now chairman, Francis Lui Yiu Tung – along with two associate directors, other employees, and “service providers” of “consulting and advisory services” as well as “ex-employees of the group”.

Galaxy Entertainment is replacing those previously-granted share options with share awards: just over 3.28 million, shared between the same categories of people. The purchase price is HKD1.00 per share.

Half the grant will vest on December 30, 2025, and the other half on December 30, 2026.

Galaxy Entertainment said in a Monday filing to the Hong Kong Stock Exchange: “In view of the fact that the exercise prices of the previously granted share options have been higher than the market price of the shares for some time,” the prior grants “no longer serve the purpose of providing motivation and incentives to the grantees.”

The company added there was “no performance target or clawback mechanism attached to the replacement share awards”.

Nonetheless, the replacement share awards were “expected to incentivise” the relevant awardees “to continue to work towards the success of Galaxy Entertainment and reinforce their commitment to long term services with Galaxy Entertainment”.

Under the new arrangement, the recently-appointed chairman Mr Lui – the group’s former deputy chairman – has 766,860 share awards, compared to 6,273,000 share options previously granted and now cancelled.

The firm also announced on Monday that it had granted to “certain employee participants” options to subscribe for a total of 528,000 shares under the share option scheme adopted by Galaxy Entertainment in May 2023.

The exercise price on the options is HKD34.08 per share, with the vesting period on December 30 in 2025, 2026 and 2027.

The group additionally granted a total of just above 6.45 million shares under its share award scheme also adopted in May 2023. The vesting period is in the same time frame as the share options.

Separately on Monday, the group announced a “discretionary bonus”, equivalent to one month of salary, for “eligible team members at senior manager grade and below”.