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Cash Awards

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Sadly, due to Covid-19, it is now virtually certain we will enter a recession. While the experts are arguing about the length and severity, everyone agrees the current circumstances will lead to many businesses failing and a spike in unemployment. We are already seeing a significant decline of share prices across all industries and the accompanying volatility in the financial markets. I recognize that many of you are worrying about more pressing problems, such as…

Although the requirements to obtain approval for an equity plan from the State Administration of Foreign Exchange (SAFE) in China have relaxed over the past few years and, consequently, the approval process has become more predictable and faster, it still requires significant resources (both financially and from a staffing perspective to administer the ongoing requirements).

Therefore, many companies (especially those with a lower headcount in China) are still looking for strategies to avoid the SAFE requirements.  And while there is never a perfect solution, most of these companies choose to grant cash awards.  Cash awards can mean different things, so let’s look at the different alternatives.