Yahoo Finance Lenovo CEO shares $3.33 million bonus with workers
BLOOMBERG -- Lenovo Group, the biggest personal computer maker, said Chief Executive Officer Yang Yuanqing will share at least $3.33 million (US$3 million) of his bonus with workers for a second straight year after posting record sales.
About 10,000 workers will get payments this month to recognise their contributions, Gina Qiao, senior vice president of human resources, said in a memo to some workers. The memo was confirmed by spokesman Jeffrey Shafer, who said the total payment will be about $3.25 million.
Lenovo posted revenue of $38 billion (US$34 billion) and PC shipments of 52.4 million units in the 12 months ended March 31 as the company gained market share and expanded sales of smartphones and tablets. The 48-year-old Yang, who gave US$3 million from his bonus a year earlier, led the company past Hewlett-Packard in the June quarter.
Related: China's Lenovo sees 34 per cent net profit jump
“This is quite rare, especially for a chairman of a Chinese company, to use his personal money as a bonus to reward employees,” said Kirk Yang, a managing director at Barclays in Hong Kong who rates the shares overweight.
Lenovo, which has headquarters in Beijing and Morrisville, North Carolina, rose 0.7 per cent to HK$7.55 in Hong Kong trading. The stock has climbed 7.6 per cent this year while the city’s benchmark Hang Seng Index has dropped 2.1 per cent.
Payments will be made to Lenovo staff in 20 countries, while about 85 per cent of the recipients are in China, Shafer said. Yang spends time in both the Beijing and Morrisville offices, the spokesman said last year.
Month’s Pay
“This payment is personally funded by Yuanqing,” Qiao said in the memo. “He believes that he has the responsibility as an owner of the company, and the opportunity as our leader, to ensure all of our employees understand the impact they have on building Lenovo.”
The average payment of about $360 (US$325) is almost equal to a month’s pay for a typical city worker in China. The average annual wage of urban workers at private companies last year was 28,752 yuan, the National Bureau of Statistics said in May. That’s equal to about US$392 a month.
Yang was paid $16.2 million (US$14.6 million) last year, including a bonus of $4.7 million (US$4.23 million) and long-term incentive awards of $10 million (US$8.94 million), according to the company’s annual report. Yang holds about 744 million shares of Lenovo, or 7.1 per cent of the company’s outstanding stock, as of the end of March, the report said.
Related: High pay doesn't mean high performance
Dell, HP
Meg Whitman, CEO of Hewlett-Packard, received nearly $17 million (US$15.4 million) in fiscal 2012 after the company posted a net loss for the year. Michael Dell, CEO of Dell, was paid $15.4 million (US$13.9 million) in the year ended February 1 when the company posted lower sales and earnings and its share price declined.
Lenovo had more than 35,000 employees globally at the end of March. Employees who received the bonus from Yang were mostly those in manufacturing paid on an hourly basis, who are not eligible for other bonus programs or sales commission, Shafer said.
Other executives to share their bonus include Oleg Deripaska of the world’s largest aluminium producer United Co. Rusal, who gave his $3.33 million bonus for 2012 to 120 employees, UPI reported in July. Simon Wolfson of Next, the UK clothing retailer, awarded his bonus of about $4.1 million to 19,400 staff, the Telegraph reported in April.
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