Chapter 551 Equity Conversion

The cabin of a private jet is quiet and luxurious.

As Liu's mother watched Song Ci pacing back and forth in the corridor, a smile of satisfaction spread across her face.

This son-in-law, worth trillions, had lost his usual composure and calmness, acting like an impatient young man, and his heartfelt joy was genuine.

She breathed a soft sigh of relief.

Previously, Liu Shishi's belly had not shown any signs of pregnancy. Although her son-in-law never showed any dissatisfaction, for a wealthy family like the Song family, the issue of succession was ultimately a top priority.

Now that her daughter is pregnant, a huge weight has finally been lifted off her shoulders.

She unconsciously clasped her hands together and silently prayed in her heart: she hoped it would be a boy, so that her daughter's position in the Song family would be completely secure.

"New Year's Day, sit down!" Liu Xiaoxian, sitting opposite, couldn't help but speak, her voice tinged with reproach, "You're making me dizzy from all that swaying back and forth."

Her face also couldn't hide her joy.

Upon learning of her daughter-in-law's pregnancy, she immediately canceled all her work and flew to Donghai with her son and mother-in-law to visit her.

A flight attendant walked over gracefully and gently reminded the still excited tycoon, "Mr. Song, the plane is about to take off. Please be seated and fasten your seatbelt."

"Okay, okay." Song Ci seemed to wake up from a dream and sat down in the leather seat as instructed, but she still couldn't suppress her excitement.

He turned around, his eyes shining as he looked at his two mothers: "Mom, Mother-in-law, I've already made up my mind!"

If it's a boy, we'll name him Song Yun; if it's a girl, we'll name her Song Yu. What do you think?

Mrs. Liu was slightly taken aback.

I never imagined that my busy son-in-law had already thought of a name for the child. This anticipation is more reassuring than any sweet words.

Looking at the happiness radiating from her son's face, Liu Xiaoxian nodded gently: "The name is very good. Yuandan, you are the child's father, your preference is the most important."

"Shishi also thinks it's good, so it's settled then." Song Ci said, her expression becoming serious. "I've already had a professional medical team assembled!"

Obstetricians, nurses, nutritionists, and postpartum rehabilitation specialists—all must be top-notch globally. The postpartum nannies and childcare experts must also be the best; none of them can be lacking!

"You're so thoughtful this New Year's Day." Mrs. Liu nodded with satisfaction, her appreciation for her considerate son-in-law growing even stronger.

Suddenly remembering something, she asked with concern, "Which hospital do you plan to have Shishi give birth in on New Year's Day?"

“Let’s go to Peking Union Medical College Hospital,” Liu Xiaoxian suggested. “Your dad is there, so it will be easier to take care of him if anything happens.”

Song Ci pondered for a moment: "Let me discuss it with Shishi before we decide. The company's COO recommended Hong Kong Sanatorium & Hospital to me, saying that this private hospital has excellent service and that she had a very good experience during childbirth."

“Hong Kong? What about the child’s household registration…” Liu Xiaoxian frowned slightly. “And I heard that Hong Kong has stopped accepting appointments from pregnant women whose spouses are not Hong Kong residents.”

"Can the 'double non' policy affect me?" Song Ci chuckled lightly, then said seriously, "No matter where Shishi gives birth, the child's household registration will be in the capital. There is no doubt about that."

Liu Xiaoxian was stunned for a moment, then understood.

She has spent most of her time in the ivory tower of academia and has almost forgotten the power her son now wields.

Only at this moment did I truly realize that Song Ci was no longer a child who needed her protection, but a business tycoon who could determine the fate of many people.

After taxiing slowly, the plane soared into the sky.

Looking out the porthole, Song Ci felt that the sunset was particularly magnificent.

Leaning comfortably back in my chair, I took out my phone, ready to send Liu Shishi a WeChat message. Suddenly, I noticed that a post I had made on WeChat Moments earlier had already received countless likes and replies.

That was a carefully edited post:

Time gives us time to wait, to wait for wonderful expectations, and to await your arrival!

1 + 1 = 3, unlocking a new identity!

At this moment, a long queue of well wishes has formed under this post.

Liu Xiangdong: "Congratulations, Chairman Song!"

Guo Guangchang: "Congratulations!"

Li Shufu, Geely: "Congratulations, Chairman Song."

Liu Yonghao: "Congratulations!"

...

Aside from relatives and friends, a host of political figures and business tycoons offered their sincerest blessings to the unborn child.

Song Ci smiled happily and replied in unison, "Thank you all! [clasped hands]"

...

Meanwhile, Tengda Culture.

"Teacher Li, thank you for your hard work today."

Zhao Liying picked up her bag, ended her acting class for the day, and politely said goodbye to her acting teacher.

She hasn't taken on any acting roles lately. Besides being busy renovating her new house, she's been attending acting classes at the company to hone her skills.

Although she is already a top-tier actress, she knows that in this rapidly changing industry, only by constantly improving can she gain a foothold.

As soon as I stepped out of the training room, the president's secretary came to greet me: "Sister Liying, President Liu would like to see you in her office."

Zhao Liying paused slightly, then said, "Okay, I'll go right away."

...

In the CEO's office, Liu Rong closed a document. Looking up at the leading lady sitting quietly opposite him, he casually asked, "How's the house renovation going?"

When asked about their first home in the capital, Zhao Liying's face lit up with a bright smile: "It's only half finished. I still need to buy home appliances; there's a lot to do."

“Everyone has high expectations for their first house.” After a few casual remarks, Liu Rong’s expression turned serious. “Liying, how long have you been with the company?”

“Five years,” Zhao Liying replied softly, secretly trying to figure out the president’s intentions.

Liu Rong nodded, her words carrying a pointed meaning: "These days, almost all top-tier celebrities in the industry have opened their own studios. You're a top-tier celebrity now, haven't you considered opening your own studio?"

Just as Zhao Liying was about to answer, Liu Rong waved her hand to stop her: "Don't rush to answer."

This is the last time I'll ask you, and the last chance, so please consider it carefully. Once you make a decision, there will be no going back.

These words made Zhao Liying's expression instantly turn serious. She lowered her eyes and quickly weighed the pros and cons in her mind.

Liu Rong didn't urge them. The office quieted down, with only the slight hum of the air conditioner running.

Time ticked by, and Zhao Liying finally raised her head, her gaze firm: "President Liu, I have given it serious consideration."

I will not open a studio before my contract with the company expires, and this decision will not change.

Upon hearing this, Liu Rong nodded in satisfaction and slowly said, "I remember you hold 3% of the virtual shares in Tengda Culture?"

"Yes," Zhao Liying replied softly. In her heart, however, she was trying to guess the president's intention in bringing this up; a woman's intuition told her that something big was about to happen today.

When the company implemented a virtual equity system in 2011, she spent 6 million to subscribe for 0.6% of the shares.

Then, in 2012 and at the beginning of this year, in accordance with the agreed price-to-earnings ratio of 5, they invested 34.3 million and 33.5 million respectively, subscribing to 1.4% and 1% of virtual shares, totaling 3%.

She took out a large loan to purchase these shares and the property.

On the surface, he is a top-tier celebrity with endless glamour, but in reality, he is heavily in debt and penniless.

Fortunately, both equity and real estate can be mortgaged, allowing for easy money-making by transferring assets from one hand to the other.

"Here's the situation." Liu Rong paused, carefully choosing his words, "In preparation for the group's IPO, the group will be reforming the compensation system and equity incentive policy for all employees in the near future."

Zhao Liying seemed to be deep in thought.

Salary has little to do with her. As a contracted artist with the company, she receives film and endorsement fees, and the company no longer pays her a salary.

So, the CEO most likely contacted her about equity incentives.

Thinking of this, a sliver of hope arose in my heart: Could she possibly have a chance to get shares in Tengda Technology?

“Your situation is rather special,” Liu Rong continued. “Besides you, all the other artists in the company have their own studios, including Yang Zi, who is also about to set up her own studio.”

Strictly speaking, they have already become independent. Once the contract expires, the company will repurchase their virtual shares according to the contract, thus completing the separation.

Since you insist on not opening your own studio, you're the only artist still within Tengda Culture's system. According to the group's articles of association, you're also entitled to equity incentives.

Upon hearing this, Zhao Liying was both surprised and delighted, and her beautiful eyes lit up instantly, sparkling with brilliance.

“But!” Liu Rong changed the subject, “because you bought virtual shares of Tengda Culture at an internal preferential price starting in 2011, and have already enjoyed the dividends of the company’s rapid growth.”

Therefore, your situation doesn't qualify for a standard equity incentive plan. For this reason, I specifically consulted COO Wang, and after discussing it with Chairman Song, he offered you two options.

Zhao Liying straightened her posture and said, "Please speak, Mr. Liu."

Liu Rong clasped her hands together on the table and explained in detail: "The first option is to follow the original contract and enjoy dividends every year."

When your ten-year partnership with the company expires in August 2018, the company will repurchase your 3% stake based on a price-to-earnings ratio of five times its 2017 net profit.

She paused briefly to gather her thoughts before continuing, "The second option is that next year, the company will repurchase your 3% stake based on a price-to-earnings ratio of five times the 2013 net profit."

All proceeds from the buyback can be used to purchase group shares. Alternatively, you can choose to settle in cash.

Zhao Liying pursed her lips. She wasn't stupid; taking cash directly would undoubtedly be the most foolish decision.

I quickly calculated in my mind, but it was difficult to judge which method would be more profitable.

So he tentatively asked, "Mr. Liu, if I were to purchase shares in the group, what would the cost price be?"

"$15 per share."

"So high!" Zhao Liying couldn't help but exclaim. According to the recent exchange rate, this is equivalent to 93 yuan per share.

Seeing the look of surprise and doubt on Zhao Liying's face, Liu Rong patiently explained: "According to the group's policy, the exercise price for employees who joined before July 2007 is $1 per share."

Those who joined before July 2010 received $5 per share; those who joined before July 2013 received $15 per share.

For those joining the company from today onwards, the exercise price is $20 per share. It may go even higher in the future.

Zhao Liying rolled her eyes and protested in a coquettish voice, "President Liu, I joined the company in 2008, why should we follow the $15 standard?"

"Playing tricks." Liu Rong chuckled. "Didn't I just say that you've already enjoyed the subsidiary's benefits, so naturally the group's welfare policies can't let you enjoy them again?"

Seeing that she couldn't get away with it, Zhao Liying smiled sheepishly and started calculating silently in her mind. But the more she calculated, the more confused she became, so she had to take out her phone and open the calculator app.

Seeing Zhao Liying busy calculating, Liu Rong added, "Tengda Culture's net profit in 2012 was 670 million yuan."

The recent box office success of "The Left Ear" has led to excellent company performance this year, with profit growth expected to be no less than 40%. You can calculate based on a valuation of 5 billion.

As for the group, its current valuation is $300 billion, with a total share capital of 10 billion shares.

Zhao Liying's eyes lit up. Her total investment cost was 73.8 million yuan.

If the company repurchases 3% based on a valuation of 5 billion, it will have to pay her 150 million. This means she has already made a paper profit of 76.2 million. Even after deducting loan interest and taxes, she will still make a substantial profit.

But then she frowned, her round face contorted in a pained expression, and sighed with regret: "President Liu, the company is paying me 150 million in one lump sum. How much tax do I have to pay?"

"You don't need to worry about that," Liu Rong reassured her. "The company's repurchase of these 3% of shares is a reverse operation of increasing share capital, so you don't need to pay personal income tax."

As the withholding agent, Tengda Culture will report this equity transaction and repurchase to the competent tax authority in accordance with regulations.

Zhao Liying was overjoyed and then lowered her head to calculate again.

Seeing Zhao Liying busy at work, Liu Rong shook her head helplessly: "Alright, alright, stop calculating. I've already calculated it for you, and you can probably buy about 1.5 million shares."

"I bought it at $15, and the group's valuation is $30 per share. Doesn't that mean I'll make a profit right away...?"

Zhao Liying quickly calculated, "23.7 million US dollars!" At this moment, her mind was already filled with the image of green US dollars.

“That’s how it is in theory,” Liu Rong said calmly. “However, the option needs to be exercised over four years, with 25% unlocked each year. And whether the stock price will rise or fall in the future is still unknown.”

There's an additional condition: acquiring shares in the group means you'll be deeply involved in building the Tengda ecosystem. This is unconditional.

Zhao Liying, however, was quite optimistic: "I have confidence in Tengda Technology, and I think the stock price will continue to rise in the future."

“The group is too big; it’s hard to say whether the stock price can rise.” Liu Rong said sincerely, “Actually, you can consider the original plan.”

The film and television industry is currently experiencing unprecedented prosperity, and Tengda Culture's performance has grown steadily in recent years. Aside from the fact that it cannot be traded, the future value of this 3% stake may not be low.

The company now only has Zhao Liying as its artist, and Liu Rong wants to make things clear to avoid future misunderstandings due to issues of interest.

“This…” Zhao Liying was unsure of what to do.

"No rush, you have a week to think about it."

After hesitating for a moment, Zhao Liying asked, "President Liu, would it be convenient for you to tell me what level of stock options these 1.5 million shares are equivalent to within the group?"

“T15, just like me.” Liu Rong’s words carried a hint of emotion, but no sign of resentment or indignation.

Given the current market conditions, and considering the revenue that top-tier celebrities generate for their companies in a year, it's fair to say that these celebrities have simply benefited from a favorable era.

However, she also held back.

T15 is the stock option standard for president-level executives of general subsidiaries, while she is a "starter" of Tenda Group, with additional rewards and equity on par with T16, a senior president of a large subsidiary.

Zhao Liying was stunned. She looked at Liu Rong in disbelief, never expecting that her shareholding level would be the same as the president's.

She knew that Tengda Group employees were divided into 18 levels, and T15 was already a senior manager. This was like a windfall.

Although she had already made up her mind, considering that this concerned the development over the next five years, she still answered cautiously: "Mr. Liu, please allow me two days to consider it before giving you an answer."

(End of this chapter)