– Stock awards
Stock cars. Equity just got a little more equitable in China. Geely Automobile said this week it would grant shares in the $35 billion company to nearly 11,000 employees, almost a fifth of its workforce. It’s a rare expansion of plans generally reserved for the top brass or technology startups. The awards represent a 3.6% stake in Geely and are designed to boost pay and help retain staff.
Geely workers have to wait 12 months to offload any of the allotment and can only sell 25% of it a year. Given the stock’s 37% annualised total return over the past five years, they may be inclined to hang onto it anyway.
Plenty of research indicates employee ownership delivers myriad benefits, and the company says the plan has been in the works for a while. It also, though, squares nicely with Chinese President Xi Jinping’s new push for “common prosperity”, giving companies there another big reason to embrace the idea. (By Jeffrey Goldfarb)