A large part of the high income of Huawei employees comes from stock dividends. One advantage of stock dividends is that it gives employees enough money without affecting the growth of net profit. At the same time, according to the current law, non-listed companies only need to pay 20% dividend tax for dividends, while listed companies pay dividends. If you hold shares for one year, you don’t need to pay dividend tax, which is far more cost-effective than adding 100,000 yuan to your annual salary and deducting 45,000 yuan in tax.
Huawei’s internal employee shares are divided into TUP and ESOP.
TUP does not need to be purchased. It is awarded every year based on performance and is valid for five years. It is more cost-effective for those who do not want to work in Huawei for a long time.
ESOP needs to be bought with money. Now the stock price is more than 7 yuan. To get ESOP, you need to sign a struggler agreement. Huawei’s share price is based on net worth. At present, the annual dividend is 1.58, which is about 20% of the dividend. Due to the high dividend, many employees buy stocks from bank loans when they cannot afford to buy stocks. Because it is very cost-effective, this year, when Huawei is facing the strict blockade of the Western world, there is still a 20% dividend. According to the experience of previous years, the loan is used to buy stocks, and the dividend will be paid back for about three and a half years. Since Huawei’s stock cannot be listed and traded, employees pay more attention to dividends.
Huawei’s virtual shares have no lock-up period and can be sold to the company at any time. Usually, when you leave Huawei, you need to sell the shares to the company. There is only one situation in Huawei where resignation can take away the stock, that is to resign from Huawei at the age of 45, commonly known as retirement. After leaving, you can enjoy Huawei’s dividends until the statutory retirement age.
Although the dividends of holding shares are very rich, it is very difficult to work until the age of 45 in Huawei. Huawei’s contract is signed every four years. After signing it twice in a row, it will be signed by another company, so as to avoid signing an indefinite contract. Some employees who are older and unable to fight will not renew their contracts until they are 45 years old.
According to the conditions of Gree’s second equity incentive, the stock dividends are similar to Huawei’s dividends, and Gree is a listed company, and there is no need to pay taxes for dividends after holding shares for one year. But precisely because Gree is a listed company, its stock price changes are more concerned than dividends. If you honestly earn 3 and a half years of dividends, how can you double the stock price in the short term?
Both Gree and Huawei are facing difficulties now. Huawei is sanctioned by the United States, and the superimposed semiconductor industry has begun to enter a downward cycle, while Gree is facing a ceiling in the air-conditioning industry, and the second growth curve is unclear. One is the manufacturing leader, the other is the high-tech leader, see which one can get out of the predicament first and have a long-lasting foundation.
$Gree Electric (SZ000651)$ $HUAWEI (temporary) (HUAW)$
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