Chinese tech giant Huawei has reportedly announced its stock dividend data for 2021 at the end of January, showing an estimated 1.58 yuan ($0.25) per share. Domestic media outlet Jiemian News confirmed the update with its sources on Monday.
In 2020, Huawei’s shares were distributed at 1.86 yuan per share. At that time, Huawei had been subjected to several rounds of international sanctions, so most employees were satisfied with the results. In comparison, Huawei paid dividends of 1.05 yuan and 2.11 yuan per share in 2018 and 2019, respectively.
This year’s dividend reduction is related to the firm’s decreasing revenue. At the end of December 2021, Guo Ping, the rotating chairman of Huawei, disclosed that revenue in 2021 is expected to total about 634 billion yuan, down 28.9% from 891.4 billion yuan in 2020.
Huawei is a 100% employee-owned private enterprise. More than 100,000 employees hold shares in the firm.
In 1990, Huawei first put forward the concept of employee stock ownership. At that time, the price of shares was 10 yuan apiece, and 15% of after-tax profits were used for equity dividends. Since then, with the rising number of employees and a changing external environment, Huawei has implemented many reforms to its equity incentive mechanism. Stock dividends have become an important part of Huawei employees’ income.
Meanwhile, employees who hold shares have to undertake risks. The development of the company and the income of employees are bound to a certain extent. Employees involved in the stock holding plan can participate in profit distribution every year. However, if the company loses money, the value of the stock will also decrease. Employees who hold shares will also bear less dividends.
In recent years, more and more listed companies have learned from Huawei and actively used equity incentives and employee stock ownership plans to facilitate the vitality of their employees.
According to a report by consulting firm Realize, 808 A-share listed companies announced 826 equity incentive plans in 2021, an increase of 82.74% compared with 452 in 2020.