Emir BardakçıXiaomi Group has made a significant step in securing its future by launching a stunning new equity incentive plan, reflecting the technology giant’s intent to retain top performers. The plan was announced just a day after releasing Xiaomi’s 2024 financial report, and it covers a staggering 83,443,656 shares of Class B common shares that will be divided among 3,877 employees and partners. The move is part of a sustained effort by Xiaomi to strengthen its grip on the global technology market with a special focus on rewarding those who drive the company’s continued success.
A Ten-Year Commitment to Employee Value
The equity incentive plan reported in filings with Hong Kong’s Stock Exchange illustrates a record level of employee commitment at Xiaomi. The most distinctive aspect of this plan is that it has a very lengthy vesting period spanning a full ten years between March 20, 2025 and March 19, 2035.
What is so attractive to recipients in this plan is that shares here are being offered at no consideration, that is, they do not have a cost to employees upfront. This greatly enhances the value proposition to hold on to talent.
Parallel Hong Kong Subsidiary Incentive Scheme
Besides the main equity plan, Xiaomi Hong Kong has also implemented a supporting stock option plan covering 62 employees of its operations in Hong Kong. The subsidiary plan includes:
- 10,244,813 shares reserved exclusively for staff based in Hong Kong
- Exercise price of US$0.1 (equivalent to HK$0.78 approximately Five-year period of unlocking
- Last exercise date coinciding with that of the parent company in March 2035
This dual-track approach brings consistency to both Xiaomi’s regional and global businesses and provides a consistent incentive structure.
Accountability Mechanisms and Future Capacity
The company has implemented tough measures of accountability in the incentive program. According to the release, participants who:
- Commit grave violations – Demonstrate integrity issues
- Transfer within the company
Their awarded but unexercised shares will be subject to mandatory redemption to ensure that such program benefits purely those who maintain Xiaomi’s high standards. Looking to the future expansion prospects, Xiaomi’s pool of equity is still healthy with 2,024,195,773 shares to offer as new incentives. The company also has a special reserve of 124,058,988 shares reserved exclusively for service providers.
Market Position and Outlook
Xiaomi Group’s closing share price was HK$58.20 a share with a market capitalization of HK$1.46 trillion (almost US$186.9 billion). The valuation is a reflection of investors’ trust in Xiaomi’s management and strategy decisions.
This new equity incentive program is a clear reflection of Xiaomi’s long-term commitment to human capital as a driving force behind innovation and market leadership in the competitive technology sector.
Source: ITHome
