Huawei pays $9.65b dividend to its workers

US sanctions force company to sell Honor and x86 units, current and retired staff bask in those profits

Flush from the sale of various business units, Huawei has distributed a whopping $9.65 billion dividend to current and retired staff under its Employee Shareholders Scheme (ESS).

A filing with the Shanghai Clearing House confirms the payment, and according to Huawei's recent 2021 Annual Report published last week, some 131,507 "beneficiaries" are enrolled in ESS, including founder Ren Zhengfei.

Huawei is owned by Huawei Investment & Holding Co Ltd, which is itself owned by two lots of shareholders, including Ren (0.84 percent of the company) and the Union of Huawei Investment & Holding Company (comprised of employees that hold 99.16 percent of the share capital).

The Representatives Commission is the organ by which the Union fulfills shareholder responsibilities and exercises shareholder rights. The Commission has 115 representatives elected by the workers with shareholding voting rights, and those reps serve a five-year term.

Under the rules outlined by Shenzhen's local authorities – the Chinese city where the company is based – Huawei managers propose the shares that workers are entitled to based on their performance. The share constitutes an element of an employee's pay.

According to reports, the buy price for the shares is calculated from Huawei's asset value per share in the prior year. These shares cannot be traded with other employees and can only be sold back to the Union.

A breakdown for the latest dividend distribution was not revealed by the Shanghai filing.

The Annual Report 2021 states that ESS "effectively aligns employee contribution and development with the company's long-term development, fostering Huawei's continued success."

That continued success has faced numerous challenges from the US. It started in anger in 2019 after former president Donald Trump threw Huawei on the Entity List to restrict the products US companies could sell to it, including chips, software, and more.

By losing access to tech such as Google's Android OS, Huawei, which at one point was vying with Samsung and Apple for the top spot in the global smartphone sales stakes, saw its handset business be obliterated in Europe and beyond.

Huawei subsequently sold the Honor brand to an entity named Shenzhen Zhixin New Information Technology Co Ltd. This, it said at the time, was due to "a persistent unavailability of technical elements needed for our mobile phone business." The decision was a "matter of survival" for the low-end sub brand, it added.

In terms of telco network infrastructure, Huawei helped BT plumb in Britain. That too was pulled apart by a hawkish US government concerned about the technology being used to help Beijing spies peer in at the West. Huawei has always denied any wrongdoing. Other countries have also decided to remove Huawei from their networks, including in Scandinavia and Eastern Europe. And such was the negative publicity surrounding Huawei in the UK that it decided to close the Enterprise business locally in the fall of 2020.

All of this ensured Huawei turned over sales of $99.9 billion in calendar 2021, down 28.5 percent year-on-year. Profit, however, went up nearly 76 percent to $17.8 billion due to Huawei offloading the Honor brand and its x86 server unit. ®

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