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By letting staff share Huawei’s stock and profit, Ren Zhengfei instils kinship and unleashes telecom giant’s ‘wolf culture’
- In the second instalment of our eight-part series on Huawei, Peggy Sito examines the unique shareholding structure of China’s largest producer of telecom gear
- Huawei is 100 per cent owned by 104,572 eligible employees, including founder Ren Zhengfei, out of a total staff of 194,000 at the end of 2019
Reading Time:7 minutes
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In late February 2019, almost three months after Huawei Technologies tumbled into its worst existential and reputational crisis, China’s largest telecommunications equipment maker invited global journalists to its Shenzhen campus in its first international media outreach in three decades.
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The company was anxious to set the record straight: it did not steal trade secrets from the United States; its 4G and 5G telecoms gear do not pose a security threat to US national security; the Chinese government does not own Huawei shares, and Chief Financial Officer Meng Wanzhou was innocent of US fraud charges. Reclusive founder Ren Zhengfei even starred in Huawei’s media blitz, granting more interviews in months than the sum of three decades at the helm of a behemoth with nearly 200,000 staff.
What kicked off the charm offensive was an open letter by Huawei’s researcher Wang Longlin – he has a joint PhD in international relations from the Peking and Cornell universities – advocating for the media-shy company to explain itself to the world. Wang, barely out of his probation when Meng – Huawei’s chief financial officer and the founder’s elder daughter – was arrested in Canada for extradition to the US, dug deep into the tool kit of Western crisis management to help the world understand the company’s idiosyncrasies.
His paean to openness struck a chord “probably because I am a newcomer,” Wang said during a recent visit by South China Morning Post to Huawei’s campus in Shenzhen’s Bantian district. “I understand what international media want to know about Huawei. It’s better to open the doors to tell them who we really are.”
For his initiative, Wang was granted the right to buy tens of thousands of Huawei’s virtual shares, each valued at 7.85 yuan (US$1.10). Wang declined to divulge his exact stake.
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The reward for Wang’s exceptional initiative offers a glimpse into an unusual corporate and shareholding structure found in very few places in business: Huawei is 100 per cent owned by 104,572 of the company’s employees, including Ren, out of a total staff size of 194,000 at the end of 2019. The staff shareholding structure, most famously practised by the UK department store chain the John Lewis Partnership, turns eligible employees into stakeholders, engendering the kind of kinship and shared responsibility that contribute to Huawei’s “wolf culture”.
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