The employees of the Group participate in share-based compensation plans under which share options and PSUs may be granted.

 

In December 2014 and August 2015, the board of directors of the Company approved the establishment of the Phase I Share Incentive Plan (the “2014 Plan”) and the Phase II Share Incentive Plan (the “2015 Plan”) for granting a maximum of 20,644,803 Class A ordinary shares. The shares reserved for grants under the plan were treated as treasury shares in the consolidated financial statements.

Options granted under the 2014 Plan and 2015 Plan are valid and effective for 10 years from the date of grant and generally vest evenly over four years. The Group originally determined that the vesting period would commence no later than the grant date and would end either on the date 6 months after the IPO date or on the service condition ending date, whichever was later. Before the IPO, the Group revised the vesting period to reflect the best available estimate of the IPO date. Before the successful IPO, any change in the estimate of the IPO date resulted in an adjustment of share-based compensation expenses on a cumulative basis in the period when such change was made.

The Group does not have statutory or constructive obligations to purchase or repay options by cash.

The following table sets forth the changes in the number of outstanding options and the weighted average exercise prices:

 

The Company recognized nil, nil and nil in expenses related to share options in 2023, 2024 and 2025, respectively. The weighted-average remaining contract lives for outstanding share options were 2.73 years, 1.71 years and 0.95 years as of December 31, 2023, 2024 and 2025, respectively. The following table sets forth the outstanding share options as of December 31, 2025 by different exercise price:

 

No share options were granted for the years ended December 31, 2023, 2024 and 2025.

 

 

On September 4, 2019, the board of directors of the Company approved the establishment of the 2019 Performance Share Unit Plan (“2019 Plan”) for granting a maximum of 15,000,000 Class A ordinary shares, and also allowing for an additional grant of up to 10,000,000 Class A ordinary shares to participants under the 2014 Plan. Such shares were issued to Tun Kung Company Limited on December 24, 2019 and were treated as treasury shares in the consolidated financial statements. On July 21, 2021, the Company’s board of directors approved and authorized the Company to repurchase an aggregate of 35,644,803 shares, which included shares relating to the 2014 Plan, the 2015 Plan and the 2019 Plan, from Tun Kung Company Limited at par value.

For the years ended December 31, 2023, 2024 and 2025, 32,000 PSUs, nil and nil were granted, respectively, which are generally subject to a four-year vesting schedule as determined by the administrator of the plans. The actual number of PSUs provided to a grantee can vary from zero to 100 percent depending on the Group’s performance against certain key performance indicators which are determined annually.

The following table sets forth the changes in the number of PSUs and the weighted average exercise prices:

 

For the years ended December 31, 2023, 2024 and 2025, the Company reversed expenses of RMB36 million, RMB18 million and recognized expenses of RMB0.3 million of expenses related to PSUs, respectively.