22 April 2019
More than 1,000 employees of Huawei were paid at least 5 million yuan last year. Photo: Bloomberg
More than 1,000 employees of Huawei were paid at least 5 million yuan last year. Photo: Bloomberg

How rich tech workers are fueling the Shenzhen property boom

Which mainland company handed out paychecks averaging nearly HK$1 million (US$129,000) last year, with 1,000 of its employees getting more than HK$5 million each?

Answer: Huawei Technologies Co. Ltd.

The Shenzhen-based company became a hot topic among mainland netizens after it disclosed that it paid a certain employee 5 million yuan (US$760,000) last year.

A document filed by Huawei with the Lowu People’s Court was circulated online.

It showed a vice president in the company’s district sales department made 990,000 yuan before tax, plus a 3.07 million yuan after-tax bonus, 465,000 yuan after-tax cash payment and 466,000 yuan tax subsidy.

Huawei said he was just one of 1,000 senior executives who topped the 5 million yuan mark.

Dubbed the Apple Inc. of China, the maker of network switches and mobile phones paid out 137.7 billion yuan in employee compensation last year.

That is an average of more than 800,000 yuan for each of its 170,000 employees.

Huawei’s phone business is mainly in India and emerging countries in Africa and the Middle East — it is definitely a pioneer of “One Belt, One Road”.

The company aspires to overtake Apple in mobile phones within five years.

It is now No. 3, behind Apple and Samsung Electronics Co. Ltd.

Huawei, under the leadership of chairman Ren Zhengfei, made a net profit of 36.9 billion yuan last year on record turnover surpassing 100 billion yuan.

That put Huawei on par with another Shenzhen-based technology firm, Tencent Holdings Ltd. (00700.HK), the sales of which also broke the 100 billion yuan mark last year.

The internet giant looks poised to surpass China Mobile Communications Corp. (00941.HK) as the largest company by market capitalization in Hong Kong.

Tencent, which operates dominant messaging services WeChat and QQ and owns half the mainland market for electronic games, paid founder and chief executive Pony Ma Huateng 32 million yuan last year and more than 274 million yuan to its highest-paid executive, the firm’s latest annual report shows.

Stock options made up a large chunk of the ballooning payroll for Huawei and Tencent.

Tencent shares have surged to over 230 times their price at the firm’s listing in 2004.

The value of Huawei, a private company, has probably increased at a similar pace.

It is said that many Huawei employees can afford to buy a Mercedes-Benz or BMW after the bonus season.

That is why netizens say, with a hint of sour grapes, that Huawei can buy up the whole of Shenzhen.

The mathematics goes like this.

Shenzhen, the country’s best performing housing market, in which prices surged 50 per cent last year, recorded new flat sales worth 222.58 billion yuan last year.

Assuming a 40 per cent down payment, 89 billion yuan could buy up the entire supply of new homes.

With its payroll alone, Huawei could buy up an amazing one-and-a-half times as many.

Now we have a clue to why Shenzhen has surpassed Hong Kong in the rate at which its home prices have been soaring.

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EJ Insight writer

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