Xiaomi gives equity incentives to over 4000 employees, after announcing share buy back
Xiaomi, the Chinese smartphone maker announced today that it will grant approximately 174.9 million Xiaomi shares to 4,931 employees, which is the largest incentive program for Xiaomi since its IPO.
The incentive program includes employees who have been with Xiaomi for many years, as well as newcomers who recently joined, according to Lei Jun, co-founder of Xiaomi, per his statement on his WeChat official account. The incentive program will give out what amounts to 0.69% of the company’s issued shares.
Xiaomi’s filing of its incentive plan to the HKSE, where the company is listed.
According to Xiaomi’s newly released 2021 financial report, it records a revenue of RMB 328.3 billion, a 33.5% increase from last year; and a net profit of RMB 22 billion, a 69.5% y increase from last year. The report shows a solid momentum of development.
Xiaomi is among the many Chinese tech companies currently buying back their shares. Like Alibaba, Midea, SF-express and others, Xiaomi has embarked on a buy back plan, for as much as HK$10 billion ($1.3 billion) of its own shares.
Large-scale buybacks not only prove that the management team is bullish about the company’s prospects, but also boost investor confidence. Previously, due to rising domestic COVID-19 cases, geopolitical risks, renewed delisting fears, etc., US-listed, Hong Kong-listed Chinese stocks dove sharply. Big Chinese tech firms including Alibaba, Baidu, JD.com and Xiaomi fell more than 10%, 8%, 10%, and 8%, respectively, on March 14.
Later, on March 16, the stock market took a leap after China State Council addressed some key concerns in the market, pledging support for economy, capital markets and overseas listings.
But with Covid-19 still in place, the geographic conflict has not been resolved, the Fed tightening liquidity, and other factors, volatility to be a major theme this year. “The geopolitical risks and uncertainties will persist this year,” Xiaomi President Wang Xiang told reporters on a conference call, per Hindustan Times.
Lei Jun has also announced Xiaomi will recruit 5000 more engineers this year, the same as the amount they hired last year. Xiaomi is currently expanding its businesses into the electric vehicle (EV) sector, aiming to invest “$10 billion in the next ten years”. Xiaomi’s first car will be priced between 100,000-300,000 yuan, with mass production expected by 2024.