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Yingzhi Yang

The founder of Chinese smartphone maker Xiaomi Corp received almost as much in compensation last year as the company made in profit.
Xiaomi said in a filing to the Hong Kong stock exchange on Wednesday that Lei Jun, its chairman and chief executive, received a one-off compensation of 636.6 million B-class shares for 2018, currently valued at HK$7.5 billion (US$956 million) based on Tuesday’s closing share price.
Xiaomi’s annual adjusted net profit for 2018 was 8.6 billion yuan (US$1.3 billion), the company reported last month.
The Class B shares are still controlled by Lei and have not been disposed of, according to the filing made to the Hong Kong stock exchange.
A Xiaomi spokeswoman said the company had no further comment.
The company said in the filing it was voluntarily identifying Lei as the recipient of the shares “in response to certain news articles published recently”, which had claimed Lei’s compensation last year exceeded the company’s profit.
Xiaomi posts 13.5 billion yuan profit in 2018, driven by strong global smartphone sales
After Xiaomi’s post-initial public offering lock-up period expired in January, Lei pledged to not sell any of his shares in the company for a year.
Lei’s compensation package last year was considered a one-time “reward” for the chief executive’s eight years of “devotion” to the company before it going public in Hong Kong, according to Xiaomi president Lei Bin, speaking at the company’s IPO press conference last summer.
“This stock reward decision was passed by the board with Lei Jun knowing nothing about it,” Lin said at the time. “Xiaomi is not the first to reward its founder before an IPO and will not be the last.”
Wednesday’s filing added that Lei had promised to donate “all the relevant shares after deducting any tax payable for charitable purposes”.
Xiaomi has felt the brunt an economic slowdown and a saturated smartphone market in China. Last year, smartphone sales in the country shrunk by more than 34 per cent year on year in the fourth quarter.
The soft market at home was offset by the company’s rapid growth in India and Europe. Xiaomi toppled Samsung Electronics to become the No 1 smartphone brand in India last year, thanks to its budget Redmi handset brand. In the European smartphone market, Xiaomi ranked fourth last year, according to estimates by research firm Canalys.
China smartphone makers spin off secondary brands to go upscale
However, the company’s expansion plans for the US have stalled over US-China trade tensions.
The company has “no timetable” to enter the US market through local carriers, Xiaomi’s senior vice-president in charge of international expansion Wang Xiang said in an interview last month. In March last year, Lei had said the original goal was to expand the firm’s smartphone business in the US by the end of 2018 or early this year.
Lei is still a shareholder and non-executive board member of Kingsoft, where he served as chief executive between 1998 and 2007. He is also an active venture capitalist with browser UCweb and live-streaming platform YY in his own portfolio.


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Xiaomi

Xiaomi founder Lei Jun earned almost as much as the company last year but pledged to donate it to charity

Xiaomi founder, chairman and chief executive Lei Jun speaks with journalists as he leaves a meeting one day ahead of the opening session of China's National People's Congress in Beijing on March 4, 2019. Photo: AP

Lei Jun, the chairman and chief executive officer of Xiaomi Corp, speaks during a product launch for the Redmi Note 7 smartphone in Beijing on January 10, 2019. Photo: Bloomberg

Xiaomi rebounds with 13.5 billion yuan annual profit, targets greater international expansion

Xiaomi founder, chairman and chief executive Lei Jun speaks at the launch ceremony of the firm’s new flagship smartphone, the Mi 9, in Beijing on February 20, 2019. Photo: Reuters

Xiaomi's Mi 9 is set on taking down its main rival (and it’s not Apple)

The Mi 9 comes in three colors, blue, pink and black, while the Explorer version is only available in ominous black. That's not Xiaomi's official name for it, but it should be. (Picture: Xiaomi)

My Moon is better than your Moon. (Picture: Xiaomi)


Xiaomi sets up artificial intelligence and big data departments to sharpen focus in tech race

Lei Jun talks to the media on the issues of reform and opening up and the development of private economy at a press conference held by State Council Information Office in Beijing on November 21, 2018. 21NOV18 SCMP/ Simon Song

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Xiaomi’s annual adjusted net profit for 2018 was 8.6 billion yuan (US$1.3 billion)


Lei Jun’s compensation package last year, almost as much as Xiaomi’s net profit, was considered a one-time bonus for his ‘devotion’ to the company before its IPO.


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