As US trade sanctions bite, Huawei has decided to raise money by selling shares to employees.
The new rule allows staff who have worked for the Chinese giant for more than five years to buy virtual shares worth 25% of their income over the past five years.Shenzhen-based Huawei is the world's largest vendor of telecommunications equipment. It is entirely owned by its 104,572 employees.But as China and the US enter a tech trade war, Huawei faces increased US sanctions, and pressure from Washington on other countries to block the company from their 5G mobile network projects.
The virtual shares are intended to help the company retain talent amid these challenges, and secure funding for research and development. Huawei's research and development budget, at 15.3% of its 2019 revenue of $19.2 billion, placed it as the global tech industry's fifth-largest investor in new R&D.The shares are an incentive to stay: If you leave computer science and engineering before clocking up eight years of employment, you have to sell your shares back.
Huawei has offered employees shares as part of their salary package since the beginning, when CEO Ren Zhengfei started selling telephone switchboards. Short on capital, and without access to loans from government-owned banks, the company offered employees generous helpings of equity in the company so they could attract the right talent without having to offer huge salaries.
No comments:
Post a Comment