Alibaba Group Holding Ltd. is set to introduce a new employee incentive plan starting April, blending equity with cash in a significant adjustment aimed at enhancing its ability to attract and retain talent amidst stiff competition.
In a company-wide memo, the Hangzhou-based firm outlined the changes, emphasizing the goal of “improving the certainty and liquidity” of compensation, according to sources familiar with the message. Commencing on April 1, employees will receive “long-term cash” alongside stock options, with the added feature of quarterly vesting for these instruments, as detailed in the memo. Despite requests for comment, Alibaba representatives have yet to respond to inquiries regarding these developments.
This strategic move arises as Alibaba’s stock faces a period of near-historic lows, diminishing its efficacy as a motivational tool. Once valued at over $800 billion, the company has grappled with rejuvenating its operations following years of regulatory scrutiny and economic challenges. CEO Eddie Wu has spearheaded efforts such as senior leadership reshuffling, investments in AI, and exploration of divesting non-core assets to reignite growth across various divisions, spanning commerce to cloud services. Furthermore, the media and entertainment arm recently pledged a minimum of HK$5 billion ($639 million) in investments in Hong Kong film and content over the ensuing five years.
In response to heightened rivalry and consumer uncertainty, other Chinese tech firms have also implemented alterations in employee compensation to bolster morale and retention. ByteDance Ltd., for instance, introduced a share buyback program for employees at a premium of 3% above the previous exercise price, aiming to provide liquidity and motivation. Similarly, JD.com Inc. revealed plans for substantial salary hikes for its workforce this year, including nearly doubling fixed salaries for frontline staff members.