Lenovo CEO Yang Yuanqing Shares Bonus With Workers a Second Year
September 3, 2013
Lenovo Group Ltd. (992), the biggest personal computer maker, said Chief Executive Officer Yang Yuanqing will share at least $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 recognize 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 $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 $3 million from his bonus a year earlier, led the company past Hewlett-Packard Co. (HPQ) in the June quarter.
“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 Plc in Hong Kong who rates the shares overweight.
Lenovo, which has headquarters in Beijing and Morrisville, North Carolina, rose 0.7 percent to HK$7.55 in Hong Kong trading. The stock has climbed 7.6 percent this year while the city’s benchmark Hang Seng Index has dropped 2.1 percent.
Payments will be made to Lenovo staff in 20 countries, while about 85 percent of the recipients are in China, Shafer said. Yang spends time in both the Beijing and Morrisville offices, the spokesman said last year.
“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 $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 $392 a month.
Yang was paid $14.6 million last year, including a bonus of $4.23 million and long-term incentive awards of $8.94 million, according to the company’s annual report. Yang holds about 744 million shares of Lenovo, or 7.1 percent of the company’s outstanding stock, as of the end of March, the report said.
Meg Whitman, CEO of Hewlett-Packard, received nearly $15.4 million in fiscal 2012 after the company posted a net loss for the year. Michael Dell, CEO of Dell Inc. (DELL), was paid $13.9 million in the year ended Feb. 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 aluminum producer United Co. Rusal (486), who gave his $3 million bonus for 2012 to 120 employees, UPI reported in July. Simon Wolfson of Next Plc (NXT), the U.K. clothing retailer, awarded his bonus of about $3.7 million to 19,400 staff, the Telegraph reported in April.
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