China's Huawei to Distribute 40 Billion Yuan Dividends This Year Despite US Sanctions

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[Asia Economy Beijing=Special Correspondent Jo Young-shin] Chinese telecommunications equipment company Huawei is set to pay bonuses totaling 40 billion yuan to its employees.

According to the economic media outlet Caijing on the 8th, Huawei recently held a meeting and decided on a dividend of 1.86 yuan per share.

As a privately held company, Huawei has a unique governance structure where most of the company’s shares are owned by many employees, including founder and CEO Ren Zhengfei, under the management of the employee union.

[Image source=Yonhap News]

Therefore, the shareholder dividends distributed at the beginning of the year effectively serve as performance bonuses for the employees.

Caijing reported that Huawei’s total issued shares exceed 20 billion, and the total dividend amount to be distributed to employees is over 40 billion yuan (approximately 7 trillion Korean won).

About 100,000 Huawei employees hold company shares. By simple calculation, each employee will receive roughly 70 million won in dividends.

In the case of Chairman Ren, who holds about a 1% stake, the dividend amount is estimated to be at least 70 billion won.

Huawei’s ability to pay a larger-than-expected dividend to employees despite U.S. sanctions appears to be due to its financial performance not significantly deteriorating.

Chinese media, citing anonymous sources, reported that Huawei’s internal financial results showed last year’s revenue and operating profit increased by 11.2% and 10.4% respectively compared to the previous year, reaching $136.7 billion and $9.9 billion.

However, since the second half of last year, U.S. sanctions have intensified, and Huawei has reportedly been unable to procure semiconductor components for its smartphones. This is why Huawei’s business outlook for this year is not optimistic. It is known that Huawei is currently using parts purchased in advance.

This content was produced with the assistance of AI translation services.