BEIJING: Chinese automaker Geely Automobile said on Monday that it had proposed a share award scheme for its employees as part of a “common prosperity” plan.
The Chinese government is encouraging companies to implement initiatives to share wealth as part of a “common prosperity” drive laid out by President Xi Jinping to ease inequality in the world’s second-largest economy by increasing the earnings of low-income groups and curbing excessive wealth among individuals.
Under Geely‘s planned scheme, the carmaker will issue up to 350 million new shares for employees, representing around 3.56% of the company’s current total number of issued shares, Geely said in a filing at Hong Kong Stock Exchange.
Geely, China’s biggest non-state owned carmaker, currently has a market capitalisation of over HK$264 billion ($33.90 billion).
The company said following adoption of the scheme, its board would in a first phase grant 167 million shares to 10,884 selected participants.
Geely’s board has approved the scheme and the company will seek the Hong Kong stock exchange’s approval to implement it, the company said.
Geely is based in eastern Zhejiang province, a commercial hub which is a pilot zone of the government’s “common prosperity” initiative, announced in June.
Earlier this month, Tencent announced it would invest 50 billion yuan ($7.71 billion) to promote “common prosperity” in China.
Reforms four decades ago that unleashed China’s market economy enabled the accumulation of vast personal wealth, with hundreds of billionaires minted in the still avowedly socialist country, deepening inequality, especially between urban and rural areas.
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The company makes the Zeekr 001 model in the eastern city of Ningbo and is expected to start delivering them later this year. It aims to sell 650,000 vehicles a year by 2025.
Chongqing-based Changan, which is developing electric vehicles (EV) with Huawei Technologies and battery maker CATL, plans to invest 150 billion yuan ($23.14 billion) in the smart electric vehicle industry in the next five years.