Huawei pays out US$9.65 billion in dividends to current and retired staff
- Some 131,507 current and former workers are involved in the shareholder scheme, according to the company’s 2021 annual report
- Huawei is 100-per cent owned by employees, including its founder Ren Zhengfei, in a structure that turns eligible employees into stakeholders
Huawei Technologies paid out dividends totalling 61.4 billion yuan (US$9.65 billion) to current and retired workers in its employee shareholder scheme, according to a filing with the Shanghai Clearing House.
Some 131,507 current and former workers are involved in the shareholder scheme, according to the company’s 2021 annual report released last week. The company is private and wholly owned by its employees, it said.
Huawei is 100-per cent owned by employees, including its founder Ren Zhengfei. The staff shareholding structure, most famously practised by the UK department store chain the John Lewis Partnership, turns eligible employees into stakeholders.
Huawei is owned by a holding company called Huawei Investment & Holding, with two shareholders: Ren with 0.94 per cent, and an entity called the Union of Huawei Investment & Holding, which holds the remaining 99.06 per cent on behalf of eligible employees.
How Huawei hones its ‘wolf culture’: make staff the co-owners
Huawei enacted its Employee Stock Ownership Plan (ESOP) in 1987 at its establishment, and implemented it in 2003 two years after Shenzhen’s local authorities laid the rules for it. Managers recommend the shares entitled by their team members as part of their pay, based on performance.
The shares are not granted freely, but must be bought for a price calculated from Huawei’s asset value per share from the preceding year. The shares cannot be traded among staff, but can be sold back to the union, according to the rules. Retired employees also own stakes, but those who leave Huawei’s employment must sell their shares back if they’ve worked at the company for less than eight years.
Huawei in midst of US-China rivalry
Huawei paid 1.86 yuan per share in 2020 dividends. The Shenzhen-based company employed 197,000 people at the end of 2020, of which 121,269 were shareholders in the company, according to its 2020 annual report released in March 2021.
The filing, published on Saturday, does not break down the dividend distribution.
It comes as US sanctions continue to weigh heavily on Huawei’s business, with full-year revenue tumbling 29 per cent last year to 636.8 billion yuan.
Net profit jumped by a record 76 per cent to 113.7 billion yuan, but that was mainly due to the sale of its budget-brand smartphone unit Honor and server businesses under US pressure.
The United States imposed a series of trade restrictions on Huawei throughout 2019 and 2020, citing national security concerns, which Huawei denies.
The restrictions impeded Huawei’s ability to design its own chips and to source components from outside vendors, crippling its smartphone businesses.
Guo Ping, Huawei’s current rotating chairman, said last week that the company still hopes to find a solution to sustain its smartphone division and will ramp up investment in research seeking microchip “breakthroughs” after losing access to certain advanced technologies because of US sanctions.
