(Bloomberg) -- Didi Global Inc. handed a group of senior executives and board members a sweet perk in the weeks before its initial public offering: shares worth billions of dollars.
The gift came in the form of stock options, free from the usual four-year vesting restriction and with a strike price Didi described in regulatory filings as “nominal.” That means the recipients are able to convert them into normal shares at almost no cost and sell them once the six-month lockup period expires.
The grants, which were disclosed in a June 28 amended version of its registration statement, may add another source of consternation for investors Tuesday after Chinese regulators ordered that it must be removed from app stores in its home market sending the stock down more than 20%.
Read more: Why Didi is falling and why China is cracking down
Didi said in the filing that it issued 66.7 million options in the second quarter to an unspecified number of senior leaders. Of those, 63.5 million vested immediately.
The vested options were worth as much as $3.1 billion as of 2:42 p.m. in New York, according to calculations by Bloomberg News. That’s down from $4.2 billion on July 1, when the shares closed at a record. Didi said in the filing that it would book a $3.03 billion expense for all of the securities in the second quarter. The Information first reported on the grants.
The company’s co-founders, Cheng Wei and President Jean Liu, control the company through a class of supervoting shares.
Didi isn’t the first Chinese company trading on a U.S. exchange to grant options with near-zero strike prices. But the practice is virtually nonexistent among large U.S. companies, which typically issue the awards with exercise prices that correspond to the stock price on the day they’re granted. Such grants usually vest over at least four years.
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