Lenovo chief gives his $3m bonus to lower-paid workers

Lenovo chief gives his $3m bonus to lower-paid workers

Summary: Yang Yuanqing, the Chinese PC manufacturer's chief executive, has parcelled out a $3m bonus that he was given for achieving record results to employees in Lenovo's call centres and production lines

TOPICS: Lenovo

Lenovo's chief executive has given a $3m bonus he received for bumper results to thousands of the computer manufacturer's lower-paid workers, reports say.

Yang Yuanqing had been given the extra cash on top of his usual bonus in May, following record results that accompanied Lenovo's ascension to the number-two PC-maker spot, just behind HP. On Thursday, a Chinese report stated that Yang had distributed the money among 10,000 workers, such as those in Lenovo's call centres and on its production lines.

The 'Yuanqing rewards' averaged out at 2,000 yuan, or $314 (£200), which is slightly less than a month's salary for many workers in China's technology manufacturing plants.

According to CNN, Yang's total earnings for the fiscal year that ended in March amounted to $14m.

Analyst figures suggest Lenovo is primed to sell more computers than HP within the coming months, albeit at a lower profit margin.

While Lenovo has been around for almost three decades, it has become a prominent brand in the West since 2005, when it bought IBM's PC business, including the lucrative ThinkPad line.

Topic: Lenovo

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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  • Refreshing

    Apple execs would never do this. Unless somebody convinced them that the indirect PR return would yield a higher return than the cash spent.

    As a consumer I'd rather see my money spent like this than be invested in nets to reduce the suicide count like at Apple's factories.
    Tim Acheson
    • And what about . . .

      MS, Google, Yahoo and myriad other companies. What the boss of Lenovo did is highly comendable and not something to be spoilt with your idiot bile. As for Foxconn, it is used by a huger range of businesses, including MS. Yes, Foxconn makes iPads and iPhones, but it also makes the XBox and the PS.
      • Yes they use foxconn

        It is commendable but the other companies you mentioned don't use Foxconn to the extent that Apple does.
        • And yetvyoubadmit that those other companies

          do use Foxconn and so they, too,are part of the problem.
    • Why does it both eryou so much?

      I note that you been across ZDNet making idiotic comments; anti-Apple comments. What is so wrong with your psyche that it bothers you that other people make different choices to you? So what, other people see the world differnt to you; they have different needs to you and use their technology different to you. And this bothers you? Rather than waste your time on ZDNet, get some help, some treatment, from a professional.
      • Why does it bother you what his opinions are?

        You clearly don't even understand his view or why he has it.

        Foxconn's situation isn't simply 'Apple uses them, but so do other companies'. The problems we've heard with Foxconn relate *directly* to Apple's practices. One suicide was caused by Apple's near fanatical obsession with security. Apple, because of its current financial clout - and far more than any other company Foxconn deals with, can demand constantly lowering of prices for Foxconn services which, since Apple is also one of Foxconn's biggest customers, if not the biggest, and they're not just the largest - they're significantly larger. So what Apple says, they get - if Apple wants Foxconn running 24/7, they do it. Which is why they have 'company dorms' where people literally live so they can work at any time of the day or night.

        Comparing other companies and their involvement with Foxconn to Apple's is simply being disinegenuous. Microsoft, HP and others neither impact Foxconn's business practices to the degree Apple does, nor do they make the kinds of demands on Foxconn Apple does.

        But getting back to his opinions. He's just one person. You already know his bias, yet here you are defending a company that has no connection to you at all other than making a product you might like without even understanding the problem (apparently). You've posted three times in response to his one comment.

        Rather than waste your time on ZDNet, get some help, some treatment, from a professional.
        The Werewolf!
        • I see that you stop at nothing to defend the indefensible

          Apple is most defintely part of the problem, but to suggest that Apple is the whole problem when you openly admit that other companies engage in business with Foxconn is disingenuous. You refer simply to one death and yet there were numerous deaths within the company. I certainly have not defended Apple and yet you have done your utmost to defend all other companies. I will be bet pounds to peanuts that what you are really doing is defending MS. It is time for you to take-off your fanboi glasses and be honest with yourself.
          • BTW

            Did you search other ZDNet articles to see what other comments that nutcase was writing, which is what I specifically rferred-to in my post. NO? I thought not!
    • Yes, Refreshing

      And excellent PR to boot. Money well spent in the mid-term. It's a great gesture. It increases employee morale. It will increase productivity. Increase sales. Increase exposure. And very likely increase Mr. Yuanqing next year's earnings considerably. May not cover the ~21% loss in compensation*, but it would be interesting to see if it does. Then more CEO's may likely follow suit -- perhaps for different reasons. I commend and encourage.

      Interesting to note that the CEO's compensation was still 3589 times higher than the average among the lower 10,000 employees according to the numbers*. After the donation, it's down to a much more respectable 2,603 times higher (*cough cough*). Still, worth commending and encouraging.

      My personal belief is that nobody is worth 1,000 times more than another hard-working individual. For example, I have had the fortunate experience of founding my first company in 1996 and being bought out in 1999. We, the founders, had a policy that no executive could ever make more than 3 times the median of all company employees and no more than 6 times the lowest paid in salary, and that bonuses were company wide proportional to length of employment and salary, but still capped at no more than a 6 fold disparity (so in theory, the managing partners could make up to 12 times the least compensated employee, but in reality, it was less than 3). We went from my initial $500 investment to $3.7M in 3 years with people who were willing to work all hours to make it happen and who did not tolerate others who did not pull their own weight. It's good business, it's good ethics, and you're not a leech on the world for doing it. If we had taken the "get the most for the least and hoard the rest", we probably would have been just me and my partner for a very long time.

      * I assumed that the average worker makes ~$325/month and therefore ~$3900/year before the gift and $4225 after. I also assumed that he would have had $14M in compensation but gave $3M away to receive a total net of $11M. This results in a donation of about 21% of compensation and would require about a 27% increase in compensation next year (forgetting about inflation and future cost of money) to offset it and allow him to repeat the same feat at no year-over-year net loss.
      Mr. Copro Encephalic to You
  • Way to go Lenovo!

    You just got promoted to the first spot for consideration for my next laptop!
  • Good too see

    Too much corporate greed in the world today. Henry Ford would be proud.
  • If only more CEOs would follow suit

    Congrats to Mr. Yang Yuanqing on doing what EVERY CEO and every BOD should be doing: rewarding the workers who actually earned the "bonus" for the company.

    My next PC purchase will definitely be a Lenovo, simply because of its CEO's generous act.

    Now, if only other CEOs and top execs would step up and do the same, we could probably start to get the economy really turned around and revved up? Who wouldn't take an extra month's salary and go pump a chunk of it back into the economy by splurging on a few things? And that would boost sales for the companies that make those products ... which would lead to more bonuses ... and more splurging ... and more bonuses ... the economy would fuel itself.

    I don't begrudge a CEO or anyone making more than the average worker. Theoretically, they shoulder a lot of pressure and responsibility. But common sense tells us that you can't have a strong economy when only a relative few ultra-wealthy hold all the wealth. After all, they only need so many cars, houses, TVs, computers, refrigerators, etc. Most of their wealth accumulates in banks.

    But give that wealth -- even just half of the difference between a CEO's compensation and what the rest of his employees make -- to the employees who really need it and they'll use it to buy the things that they need and want. And that'll fuel more sales. Simple economics. If only the boardrooms would understand this and start using it as a gauge for how much to give their execs, I suspect they'd see growth and corporate profits like they haven't seen in decades ... if ever.

    Again, kudos to Yang Yuanqing for setting an excellent example. Let's hope others follow his lead.
    • want to talk about giving...

      Go talk to Mr. Romney who pulled in 43million dollars last year and has so far refused to show the world his tax filings... even though his dad is the one that started the whole "show your tax filings" for US government nominees.

      granted he does give out charity (approx 6% of his and his wife's income), but what in the world are he and his wife doing to earn over $21 million per year, each? he is not even governor any more.
  • Big improvement

    Every company that has a profit-sharing plan should do it this way instead. Just give out the whole wad to the CEO as a bonus, and have him pass it out as a gift. Great PR, everybody thinks the Head Duck is a wonderful guy, you don't even get surly comments about how the profit-sharing sucks this year.
    Robert Hahn
  • ...have him pass it out as a gift.

    Uhm, then it would be neither a bonus to the CEO, nor a gift from him. Compelling one to relinquish earned income for another's charity is theft.
    • We know that.

      That's also why Americans who study and work hard, only to have to train their cheap replacements or lose out on other opportunities say the same thing, about theft...

      Besides, Ayn Rand, the leader of "government entitlement programs are for leeches", when it came time for her, chose to ignore her own ideals and partake in those programs - using her husband's name. Probably out of being noble to him rather than hiding her own name... you might want to look up your role models and then question them when truths about their double-standards become apparent...
  • Good for him

    Just a few things to consider in context. Despite their bluster the ruling classes in the region fear an uprising very much. $3 mill is surely chump change to him. The fact this article exists proves it's not void of PR value.
    • $3M isn't chump change for anyone

      But to put it in perspective - from the article - the $3M was part of $14M he received that year... which makes it around 1/5 or 21.5% of his earnings. True, that still leaves him with $11M, not exactly chickenfeed.. but nonetheless, he didn't have to give anyone anything.

      When was the last time Steve Jobs or now Tim Cook or Steve Ballmer give their employees (or a charity for that matter) 20% of their yearly earnings.

      In fact, the only one in the tech sector I can think of is...

      Bill Gates.
      The Werewolf!
      • Only in America

        In the US it's not necessary to cater to workers. The lower classes can be crushed easily.

        As far as Bill Gates, maybe he's given money, but how much has his frankenstein's monster taken away? We'll never know.
  • Mr Yang has set a good example

    In the real world, a lot of economic outcomes, including executive pay, are mostly based on social norms, and not actual contributions to economic output. This is apparent when one compares differences across countries. For example, the extremely high pay levels of US executives, relative to workers, would be socially unacceptable in most developed countries (e.g. Germany).

    If Mr Yang's gesture helps to promote a social norm of lower executive pay and greater equality in China, it will contribute to the development, stability and prosperity of both China and the world. A balanced Chinese economy is essential for a stable global economy, and workers with sufficient purchasing power to buy a large share of what they produce are vital to a balanced economy. (Henry Ford and other mid-20th century American executives understood this, but it was all forgotten in the mad dash to neoliberalism that started in the 1970s.)

    Neoliberals with a quasi-religious belief in the ability of markets to perfectly reward all individuals for their contributions to economic output would of course view Mr Yang's decision to distribute his bonus to workers as inefficient – transferring income from a 'deserving' executive to 'undeserving' workers. However, the simplistic dogma of neoliberalism has little to do with reality.