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Lenovo Boss Shares Bonus With Workers at His Chinese Company

Image: Lenovo Boss Shares Bonus With Workers at His Chinese Company

Wednesday, 04 Sep 2013 08:50 AM

By Clyde Hughes

For a second year, Lenovo CEO Yang Yuanqing will share most of his $3.25 million executive bonus with workers, most of them in China, the computer giant announced.

Yuanqing will give away roughly $3 million of the bonus to employees, working out to about $325 for each of the some 10,000 workers, according to DailyTech.com.

Bloomberg said the $325 is almost equal to a month’s pay for a typical city worker in China, which is $392, Bloomberg reported.

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"This payment is personally funded by Yuanqing," Gina Qiao, senior vice president of human resources for Lenovo said in 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."

Payments will be made to Lenovo staff in 20 countries but 85 percent of the recipients are in China, Lenovo spokesman Jeffrey Shafer told Bloomberg. Lenovo has headquarters in Beijing and Morrisville, N.C.

"This is quite rare, especially for a chairman of a Chinese company, to use his personal money as a bonus to reward employees," Kirk Yang, a managing director at Barclays Plc in Hong Kong, told DailyTech.com.

The Chinese company reported record sales this year. Bloomberg reported that Lenovo posted revenue of $34 billion and personal computer 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.

Lenovo, which over took Hewlett-Packard as the world's top PC maker in the June quarter, gave his $3 million bonus to employees in 2012, according to Bloomberg.

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Executive pay has exploded since the 1990s because of a change in the U.S. tax code, according to the Huffington Post. That change, according to the website, capped deductions for executive pay at $1 million, but allowed it in a loophole for "performance-based" income that exceeded the $1 million limit.

The left-leaning Roosevelt Institute argued that this type of compensation outside of the executive's base salary – such as stocks that are directly tied to company's share performance, earnings or market share – hurts the economy.

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