GGRAsia – Melco Intl rejigs share option scheme as stock price down

Melco Intl rejigs share option scheme as stock price down

Apr 07, 2022 Newsdesk Latest News, Macau, Philippines, Top of the deck

Hong Kong-listed Melco International Development Ltd, led by casino entrepreneur Lawrence Ho Yau Lung (pictured in a file photo), is cancelling a series of share options previously granted to employees and other people connected to the group. The firm is replacing those share options by new ones, under revised terms, including a much lower exercise price.

Melco International said in a filing on Wednesday that the move was because the original scheme was longer attractive for grantees, following a sharp decline in the company’s stock price.

Melco International’s stock price stood at HKD7.10 (US$0.91) at the end of the trading day in Hong Kong on Wednesday. The company’s share price has dropped by more than 50 percent over the past 12 months.

The exercise price of the replacement share options is HKD7.278, stated the firm.

“In view of the fact that the exercise prices of the previously granted share options ranging from HKD10.24 per share to HKD23.15 per share are substantially higher than the prevailing market price of the shares, the previously granted share options can no longer serve the purpose of providing incentives or rewards to the grantees,” the company said in its filing.

Melco International is the parent of U.S.-listed Melco Resorts and Entertainment Ltd. The latter operates casinos in Macau, the Philippines and Cyprus.

Melco International wrote in its Wednesday filing: “The replacement of the previously granted share options by the replacement share options – which bring the exercise price to the current trading price level of the shares – and the replacement share awards will better serve the objectives of the share option scheme and the share purchase scheme.”

According to the firm, such objectives include “recognising the contributions of the grantees to the group and providing the grantees with incentives so as to retain them for the continual operation and development of the group.”

Melco International also said it was launching a new scheme to grant share options to employees and people linked to the company. It covers a total of 933,000 options to be granted, with a validity of 10 years running until April 2032, and an exercise price of HKD7.278.