Xiaomi Awards 4,110 Participants with Total Equity Value of $290 Million
On the morning of March 28th, Xiaomi announced on the Hong Kong Stock Exchange that its board of directors awarded a total of 190 million shares of incentive shares to 4,110 selected participants under the share incentive plan on March 27th, 2023. The award price was HKD12 (about $1.53) per share based on the closing price on the day of grant. It is estimated that these incentive shares are worth HKD2.28 billion (about $290 Million) and each participant can receive an average of HKD554,700 (about $70,663).
Xiaomi announced last year that on November 24, 2022, the board of directors awarded a total of approximately 43.3206 million shares of incentive shares to 510 selected participants under the share incentive plan, with 509 selected participants being non-related grantors and one selected participant being a related grantor.
On the evening of August 21st last year, Xiaomi announced that according to the share incentive plan, it would award a total of 92.7484 million shares to 3,142 selected participants. According to previous disclosures by Xiaomi, on March 23rd and May 20th in 2022 respectively, the company distributed approximately 175 million shares and approximately 55.3482 million shares to 4,931 and 1,875 selected participants respectively.
In fact, issuing equity incentives has become a regulation for Xiaomi. According to incomplete statistics since its listing on the stock exchange market , Xiaomi has issued a total of eighteen equity incentive plans so far; four times in 2019, five times in 2020, and four times in 2021. Among them, the company rewarded employees with about 267 million shares of stock in 2021.
Stock-based incentives are one of the common ways for listed companies to motivate their employees. Analysts point out that equity incentives can help enhance the subjective initiative and stimulate employee vitality of management in listed companies, promote the formation of a community of interests, enable enterprise employees and managers to grow together, and further promote the company’s long-term stable development goals.
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On March 24th, Xiaomi Group released its full-year performance announcement for 2022. It achieved a total revenue of RMB 280 billion in 2022 with an adjusted net profit of RMB 8.5 billion (about $124 million). The cost for innovative businesses such as smart electric vehicles was RMB 3.1 billion, and annual research and development expenses reached RMB 16 billion with a five-year compound growth rate reaching up to 38.4%. The proportion of research and development personnel has further expanded to nearly half of the total number of employees.
The most market-focused business is still smart car business. According to financial reports, Xiaomi‘s innovative businesses such as smart electric vehicles are progressing as planned with an expense investment reaching RMB31 billion in 2022 while its automotive business research team has about 2300 people in size. When mass production enters next year, Xiaomi‘s mobile phones, cars, and smart homes will be integrated into one chain which will bring greater performance elasticity.