Alibaba Overhauls Incentives to Entice Staff as Stock Languishes
(Bloomberg) -- Alibaba Group Holding Ltd. will roll out a new employee incentive plan starting April that combines equity with cash, a significant adjustment designed to help the e-commerce giant attract and retain talent despite fierce competition.
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The Hangzhou-based company told employees in a company-wide memo the changes are aimed at “improving the certainty and liquidity” of its compensation, according to people who’ve seen the message. Starting April 1, staff get “long-term cash” in addition to stock options. Those instruments will also vest once a quarter instead of only once a year, according to the memo. Alibaba representatives didn’t respond to an emailed request for comment.
The latest move comes as Alibaba’s stock hovers close to historic lows, diluting their effectiveness as a motivating tool. The company, once worth more than $800 billion, has struggled to revitalize its businesses after years of regulatory scrutiny and an economic downturn.
Chief Executive Officer Eddie Wu has reshuffled senior leadership, led investments into AI and explored the sale of non-core assets, among other efforts to revive growth at divisions from commerce to the cloud. Its media and entertainment arm on Monday pledged at least HK$5 billion ($639 million) of investment in Hong Kong film and content over the next five years.
One of Wu’s top priorities is shoring up morale among its 200,000-plus workforce, particularly as Beijing’s campaign to curtail private enterprise saps growth across the tech industry.
Other Chinese tech companies have also made changes to employee compensation to boost morale and retention, in the face of intense rivalry and uncertain consumption.
Last year, ByteDance Ltd. offered to buy back employee shares at a price 3% above a previous exercise, which the company said was aimed at providing liquidity and motivating employees.
Rival JD.com Inc. also planned sweeping salary increases for its workforce this year, including nearly doubling the fixed salaries for some of its front-line staff.
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