Didi’s shares dip below offer price, but not before ride-hailing app granted US$3 billion in pre-IPO options to executives

Chinese ride-hailing giant granted 66.7 million share options to an unnamed group of executives and directors as part of an incentive plan in the second quarter

Didi is facing an inquiry into its data collection practices by Chinese authorities

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Traders work during the IPO for Chinese ride-hailing company Didi Global on the New York Stock Exchange (NYSE) floor on June 30, 2021. Photo: Reuters

Published: 3:30pm, 7 Jul 2021Updated: 1:11pm, 8 Jul 2021

Didi Chuxing granted its senior executives and directors US$3 billion in stock options during the second quarter, just ahead of the company’s US$4.4 billion initial public offering (IPO) in New York last month.

Under the company’s equity incentive plan, an unnamed group of executives and directors received 66.7 million share options with a “nominal exercise price” per share, with the bulk of the options going to senior management on an “accelerated and vested fully” basis, the company said in an updated regulatory filing just days before its June 30 trading debut.

Didi said the awards would result in US$3.03 billion in share-based compensation expenses in its second-quarter results, as well as additional expenses of US$136.4 million in connection with the immediate vesting.

“We believe the granting of share-based awards is of significant importance to our ability to attract and retain key personnel and employees, and we will continue to grant share-based awards to employees, directors and consultants in the future,” Didi said in its June 28 amended prospectus.

The options may rankle as investors rue their losses in a stock that has fallen nearly 11 per cent below its IPO price in the four trading days since going public.