Alibaba pon­ders ways to keep flock to­gether

China Daily (Canada) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Even as Alibaba Group Hold­ing Ltd pre­pares for what could be the largest tech ini­tial pub­lic of­fer­ing in his­tory, its top of­fi­cials are rack­ing their brains on­ways to re­tain talent. The ini­tial pub­lic of­fer­ing, which an­a­lysts es­ti­mate could value the Chi­nese e-com­merce be­he­moth up to $170 bil­lion, could gen­er­ate more than a hand­ful of mil­lion­aire em­ploy­ees af­ter their shares are unlocked. Com­pany of­fi­cials are ap­pre­hen­sive that the these new mil­lion­aires may want to move on, thereby leav­ing the com­pany bereft of sev­eral key per­son­nel.

Ac­cord­ing to Alibaba’s draft prospec­tus, cur­rent and for­mer em­ploy­ees hold 26.7 per­cent of the ex­ist­ing shares, and many of then have en­hanced their hold­ings through stock op­tions and other in­cen­tives since 1999.

That could trans­late into roughly $44.8 bil­lion worth of unlocked shares, ac­cord­ing to es­ti­mates from a Bloomberg sur­vey of an­a­lysts.

Alibaba, how­ever, has not dis­closed the ex­act num­ber of em­ploy­ees who hold shares in the com­pany. These could in­clude top man­agers, mar­ket­ing per­son­nel and soft­ware de­sign­ers, sources said.

Sev­er­alBMWdeal­er­ships in Hangzhou, where the com­pany is head­quar­tered, have al­ready re­ceived in­quiries from Alibaba em­ploy­ees ask­ing if they have mod­els in the com­pany’s cor­po­rate color of or­ange, Reuters said.

Some of the 20,000 em­ploy­ees have al­ready had the op­por­tu­nity to sell part of their stakes dur­ing pre­vi­ous Alibaba struc­tured share sales through the so-called liq­uid­ity pro­grams, ac­cord­ing to the Reuters re­port.

Such wor­ries have also been ex­pressed in com­pany fil­ings.

“It may be dif­fi­cult for us to con­tinue to re­tain and mo­ti­vate these em­ploy­ees, and this wealth could af­fect their de­ci­sions about whether or not they want to re­main with us,” said an Alibaba em­ployee in Hangzhouwhoasked not to be named be­cause of the sen­si­tiv­ity of the is­sue.

“I know of a di­rec­tor-level ex­ec­u­tive who is de­ter­mined to leave af­ter the shares are unlocked.”

The con­cerns are far from overwhelming. Ac­cord­ing to Reuters, Face­book Inc mil­lion­aires spent some of their cash book­ing a trip with a pri­vate space tourism com­pany and on an ex­plo­ration of an­cient Mayan ru­ins in Cen­tral Amer­ica, while some Google Inc share­hold­ers cashed in dur­ing the In­ter­net firm’s IPO to travel around the world.

In re­cent years, Alibaba ex­ec­u­tives have dis­cussed with em­ploy­ees how the IPO wind­fall gains could change their lives, and coun­seled them on be­com­ing “dig­ni­fied and warm­hearted” people who are al­ways will­ing to help.

Last month, Jack Ma, the com­pany’s charis­matic founder had told em­ploy­ees of the group’s mi­cro-fi­nance busi­ness unit that they should not spend their big for­tune from the IPO on “glitzy things”.

Ma also wrote a memo on Lai­wang, a mo­bile chat app de­vel­oped by Alibaba, say­ing that the long-term de­vel­op­ment of the com­pany re­lies on at­tract­ing high-pro­file talent and in build­ing up a com­mon value sys­tem.

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