“Who owns Huawei?” Recently, two American professors published a report on this topic, which aroused the attention of foreign media on Huawei’s control.
Recently, the chief secretary of Huawei's board of directors, Jiangxi Sheng, was interviewed by many foreign media in Shenzhen, and responded openly to the concerns of Huawei's shareholding system and governance mechanism.
Jiangxi Sheng said that Huawei has more than 90,000 employees who hold shares in the company through trade unions. It is a 100% company held by employees. There is no external government or institution. The capital of every penny of Huawei is the money that employees come in. . There is no state-owned capital holding Huawei, and Huawei bond issuance is mainly carried out in Hong Kong and foreign capital markets. At present, no debt has been issued in China. From now on, most of the bank loans are mainly overseas, accounting for about 70%.
He said that Huawei has a shareholding of more than 50 people or more than 200 people. There is no way to directly register as a shareholder of the company. Huawei has a legal basis for the use of trade unions as a platform for employee stock ownership. In 2001, the Shenzhen Municipal Government issued a company internal Employee stock ownership regulations, this situation is not only in Huawei, many companies in early China have adopted this approach.
Jiangxi Sheng denied that the outside world believes that “Huawei employees’ shareholdings are only a contractual profit distribution plan.” He said: “Huawei employees have to pay in, participate in profit distribution, and bear the risk of possible impairment. Also elect The shareholding employee representatives exercise their power, so the Huawei equity distribution plan is not a profit sharing plan, but an equity plan. The exercise of shareholder rights as shareholder power is exercised through one share and one vote to hold employee representatives. The electoral representatives exercised shareholder power on behalf of more than 110 people.
Regarding the influence of founder Ren Zhengfei on the company, Jiangxi Sheng said that the governance of Huawei is just a veto, not a decision, and only a major issue has a veto power. Not all matters are rejected. The impact of Ren Zhengfei on Huawei is Through the philosophy of thought and management.
The following is an interview record:
Jiangxi Health: Good morning, media friends! Also greet the online interview friends, before the start of the problem, take a few minutes to introduce the company ownership profile. Before that, I would like to thank the two professors in the United States for writing the article, and then we have such an interview today, so that we have the opportunity to make clear about some aspects of Huawei's ownership.
1. Huawei is 100% owned by employees. This is the basis for Huawei's 30 years of continuous development.
The figures on the PPT are clearer and are extracted from our annual report. Huawei publishes annual reports every year. Huawei has more than 90,000 employees who hold shares in the company through trade unions. Therefore, Huawei is a 100% company owned by employees and does not have any external government or institutions.
It is precisely because Huawei's mechanism is controlled by internal employees, so Huawei has been able to maintain independence for the past 30 years. This independence also includes adherence and adherence to the company's strategy.
In fact, in the past decade or two, China’s real estate has been the most profitable. Many companies are doing real estate, but Huawei has not been affected. In the past few years, the Internet and ICT industries have emphasized the slogan. Huawei has not followed this trend, including self-driving cars.
In terms of industry management, Huawei is in ICT. In 2000, PHS developed very well in China. In the past few years, 3G developed China's 3G standard. Huawei did not have too much influence on this aspect and maintained its own development strategy.
Second, Huawei's capital for every penny comes from employees' money. Therefore, Huawei employees will not allow external influences to damage the interests of Huawei employees, including the long-term development of the company.
Third, Huawei has no external reliance and resources. Therefore, Huawei has only one point, that is, employees must work hard to work. This has prompted every employee to work hard. Not only do employees work hard, they also ask, supervise colleagues and even his leaders to work hard. At this point, Huawei employees cannot tolerate laxity and internal corruption. In addition, shareholding employees are also natural monitors of the company's compliance operations.
Second, Huawei's trade unions are independent of each other in the sense of the organization of the trade union law and the carrier of employee stock ownership.
In terms of Huawei's trade unions, China has a trade union law, and Huawei has established trade unions in accordance with the requirements of the Chinese Trade Union Law. However, as a carrier and platform for employee stock ownership, the two aspects operate independently. There are three nouns here: trade unions, trade union committees, and shareholding employee representatives.
The Huawei trade union is an organization registered in the Shenzhen Trade Union. The trade union committee is a management body elected by the trade unions according to the requirements of the trade union law, and is not assigned by the higher-level trade unions. Huawei now has seven members of the trade union committee. The shareholding employee representative meeting is the organization that the trade unions use as a shareholding platform to exercise shareholder rights on behalf of the shareholding employees. It is elected by the shareholding employees by one vote, and currently has 115 members. Why are they independent of each other?
As mentioned earlier, the management organization is different. Second, the responsibilities are different. According to the trade union law, the trade union law's duty to the trade union is to protect the legitimate rights and interests of employees. The focus is on coordinating employee labor relations, caring about employees' lives, and solving some of the difficulties in employee life. This is a requirement of trade union law. The law that is followed is the trade union law of China. The source of the labor union funds is paid by the company according to a certain proportion of the salary. The labor union funds are used for some activities of the employees and the trade unions. When the trade unions are actually liquidated, the balance of this part of the funds is disposed of by the higher level trade unions.
As a trade union platform for employees, its management organization is a shareholding employee representative meeting, which is to fulfill the shareholder duties and obligations of the shareholding employees. The laws to be followed are mainly the company law of China and some regulations on the internal employee stock ownership of the state department. There is a Shenzhen company internal employee shareholding regulation in Shenzhen.
As the source of assets of the shareholding union, the fund is invested by the shareholding employees. After the shareholding employees invest in the trade union, the trade union puts the money into the capital of the holding company for the long-term development of Huawei.
After the employees have invested in the funds, they can participate in the profit distribution every year, so the profit distribution of Huawei company is distributed to the shareholders. At the same time, if the company loses money, the value of the stock will also decrease, and the shareholding employees will bear the risk of impairment. If the company is liquidated or the union is liquidated, the assets of this part of the shares are allocated to the shareholders who are registered at the time and distributed according to the proportion of their shares.
3. What are some of the recent untrue arguments on the Internet?
Recently or some time ago, there are some sayings or comments on Huawei's ownership on the Internet, including an article by two professors. In fact, many aspects are untrue or not.
Regarding the distribution of Huawei, it is not an equity, but a profit distribution plan for a contract. The fact is that Huawei employees have to pay in, participate in profit distribution, and bear the risk of possible impairment. It is also necessary to elect a shareholding employee representative to exercise power. Therefore, the Huawei equity distribution plan is not a profit sharing plan, but an equity plan.
The trade unions in China have a state-owned attribute, so it is judged that Huawei is owned by a state-owned enterprise or a state. This is also wrong! The Huawei trade union is established in accordance with the requirements of the Trade Union Law, but the employee stock ownership plan is managed in accordance with the company law and the Shenzhen company internal employee shareholding regulations, and it is completely in accordance with the trade union, whether it is in operation or in daily finance and final liquidation arrangements. Trade unions operate independently in the sense of law. If the union is bankrupt and liquidated, it is wrong to give money to the higher-level trade unions and the employees are not. If the union is bankrupt or the company goes bankrupt, this part of the employee's shareholding should be allocated to the registered employees at that time.
Regarding Huawei’s Ren Zhengfei, he has a veto power and believes that Huawei’s management control is mainly achieved through Ren Zhengfei’s veto power. This is also wrong! Ren Zhengfei does have a veto power. It is only a major matter that has a veto power. Not all matters are rejected. Second, he only has the veto power, not the decision. Ren Zhengfei’s influence on Huawei is focused on the philosophy of thought and management. On the Internet or within a few days of Huawei, you can see a general speech. He is managed by this aspect.
Here is a story. Huawei had a famous big water tank in the past few years. It was white enamel. Every time the meeting was held, the general manager had not yet arrived at the water tank. Wherever the water tank went, where did the water tank follow? Because he has a lot of speeches. In recent years, I have not seen it because the company has coffee shops and water everywhere. This shows that Ren always uses his speech to influence everyone through his thoughts.
The above is the introduction to everyone in advance.
Financial Times reporter: I have a few questions to ask Jiang. On the record of Tianyue, we can see that Huawei Technologies is 100% owned by Huawei Investment Holdings Co., Ltd., about 1% of Huawei Holdings is Ren Zong, and the remaining 99% is the Trade Union Committee. What is the difference between the two different systems of trade unions and trade union committees? Why is it a trade union committee rather than a trade union?
Second, you mentioned that there is a restriction on the company in China. It is impossible for tens of thousands of employees to be owners. Who is the owner of the trade union committee for the trade union committee?
Third, for Huawei investment holding companies, who are their employees?
Jiangxi Health: This issue is very good. Regarding trade unions and trade union committees, trade unions generally refer to legal person organizations and are grassroots trade union organizations registered under the trade union law. The trade union committee is the governing body in the trade union. In the relevant documents of Chinese trade union management, sometimes two concepts are mixed. In order to distinguish these two concepts, generally speaking, we refer to the trade union refers to the legal person organization, and the trade union committee refers to the management organization.
Second, regarding the number of people, as a limited liability company, there is a limit on the number of people to register as a shareholder. This is a limit of 50 people. If it is a non-listed joint stock company, the number of people is limited to 200. At Huawei, the number of shareholders is far more than 50 or more than 200. Therefore, it is impossible for Huawei employees to directly register as shareholders of the company, whether as a limited liability company or a joint stock company. Therefore, in this case, only the trade union is used as a carrier and platform for employee stock ownership.
This practice also has a legal basis. In 2001, the Shenzhen Municipal Government promulgated the company's internal employee shareholding regulations. This situation is not only in Huawei, but many companies in early China have adopted this approach.
As everyone knows, companies like Ping An, Shenzhen Vanke, and Lenovo have used trade unions as a carrier for holding shares to hold employees' shares. There are many other companies that still use the union as a shareholder to register for employee stock ownership.
About Huawei Investment Holdings Co., Ltd., this company is a holding company, and some subsidiaries, including Huawei Technologies, are subsidiaries, mainly ICT services, and Huawei terminals are also subsidiaries, mainly terminal and consumer businesses. The employees of the holding company are mainly some functional departments of comprehensive management, like I belong to the employees of the holding company.
New York Times reporter: Hello, the question just now is more about the relationship between the trade union and the trade union committee. My problem is biased towards the relationship between the trade union committee and the employee representative meeting. The 115 members of the shareholding employee representative meeting are the representatives of the shareholding employees exercising their rights and one vote. The corresponding laws and regulations are the Chinese company law and the internal management regulations of Shenzhen Municipality on employee stock ownership. What does the trade union committee play in it? Kind of role? What is the relationship between a trade union committee composed of 7 people and a representative of a shareholding employee? Thank you!
Jiangxi Health: There is no relationship between the two in terms of operation.
CNBC Reporter: Hello! The two scholars pointed out that Huawei's shareholding employees hold virtual stocks, which is only a mechanism for profit sharing. Can you explain the true nature of Huawei's virtual stock? How is it priced? Can I trade? Is it really just a mechanism for profit sharing?
Jiangxi Health: Why is it called virtual stock? Because employees are not directly registered as shareholders, not Huawei's direct shares, so we call virtual. However, the union shares of Huawei are all corresponding to each shareholding employee.
Second, the company's profits are entirely owned by the shareholders, or they may not be allocated, they may be allocated, or they may be reserved for future development.
Third, if Huawei loses money, the value of the stock will decrease.
A one-vote election holds the rights of employees to exercise this part of the shares. Therefore, shareholder power is exercised by representatives of shareholders holding elections.
First, it is impossible for the benefit-sharing plan to exercise this power. Second, the benefit-sharing plan does not have to save money. Third, the benefit-sharing plan is unlikely to cause its own losses. Fourth, the benefit-sharing plan will not have the right to share the remaining assets during the liquidation.
So it is a virtual stock, not a benefit sharing plan. As for the price just mentioned, our virtual stock calculates the value of net assets per share based on the financial report audited by KPMG each year. Of course, we must plan for the dividends of the year.
CNBC Reporter: Can you trade?
Jiangxi students: employees cannot transfer each other internally. Each year, employees can also apply for a partial repurchase. If the employee leaves the company, the company will buy back. If certain conditions are met, leaving the company can retain the stock.
The Economist reporter: You pointed out that the trade union is an institution registered under the relevant Trade Union Law, and the trade union committee is a governing body. The two are actually independent. But the union must go up to the national union to be responsible for it. How to completely separate the trade union committee from the trade union, the trade union committee will not be controlled by the government and the state?
Jiangxi Health: Huawei's trade union committee, as a grassroots trade union committee, operates and manages according to the trade union law.
The duties of the grassroots trade unions are basically similar to those of some foreign trade union organizations. However, Huawei holds shares in the name of a trade union. As a platform for holding shares, the trade union is managed by a representative of the shareholding employees. It is separate and independent from the trade union committee. What are the activities organized by our company’s trade union committee? It is an employee's leisure activities. There is a life coordination committee including basketball associations, badminton associations, table tennis associations, running associations, photography associations and other associations organized by the trade union committee.
South China Morning Post reporter: Hello! You just mentioned that the veto has a major matter and there is no right to decide. What major issues have veto power? Is there any specific provision?
Jiangxi Health: There are clear regulations. There is a governance charter in Huawei. The governance charter clearly defines what aspects, such as the company's capital increase, capital structure adjustment, governance charter, revision of major governance documents, including candidates for company directors and supervisors. There is a veto power in the nomination of people. This veto is not easy to use. The governance charter clearly stipulates the responsibilities, powers, and checks and balances of each governance organization, including the shareholding employee representative meeting, the company's board of directors, and the board of supervisors.