#57 - Section: Equity is fierce

Another Huawei executive frowned and said, "Can we even apply for that? Even if Huawei applied, we wouldn't get it."

Old Master Ren was also puzzled as to how it could be approved. However, after learning from Director Wang Cheng, he understood that Audi Automobile Manufacturing Company had already developed a new type of engine, achieving a breakthrough and leading foreign countries by at least ten years. Therefore, Old Master Ren smiled confidently and said, "Yes, we will get the approval next year. When Gangcheng Xu Wenwei mentioned it, he revealed a subsidiary."

Xu Wenwei said, "President Ren, you're talking about Audi Automobile Manufacturing Company. It doesn't seem to have much technology. It used to be a parts factory."

He didn't even bother to investigate Audi Automobile Manufacturing Company. He only checked some of the leading subsidiaries and found that these subsidiaries didn't have much technology. All the technology was authorized by the laboratories, so he didn't bother to check further.

"Don't underestimate this subsidiary. They are using this company's technology to apply for loans and commercial land from the Ministry of Industry and Information Technology." Afterwards, Old Master Ren explained it to the Huawei executives again.

Old Master Ren took a sip of tea and continued after a moment, "What's even more interesting is that Huaxing Technology, which he founded, has to some extent imitated our company's virtual equity incentive system in its employee incentive policies, only with slight modifications. Some aspects are even more aggressive."

"Especially Huaxing Laboratory, which is almost arranged according to our company's incentive model. All management and research personnel only have virtual equity and only enjoy dividends. In reality, 100% of the actual equity has always been in Lu Haifeng's hands."

"Such a laboratory structure fully reflects Lu Haifeng's emphasis on control, not allowing any capital to interfere. Huaxing Technology is just a tool for attracting money, while Huaxing Laboratory is his core."

Old Master Ren revealed a gentle and kind smile on his face, but his eyes became infinitely deep as he said, "This is a great thing. We shouldn't feel threatened, but rather happy. This shows that we are not alone in this endeavor."

"I wish there were more research and development laboratory institutions like this in Great Xia Country. This is much better than Huawei fighting alone, and our development model has also been recognized and imitated by others. This is more meaningful than how much money we earn every year."

It is particularly worth mentioning that Huawei's development model is unique not only in China but also globally. It is completely a freak.

Huawei has tens of thousands of shareholders, and all employees within the company are shareholders, with very few foreign shareholders. This also makes it as difficult as ascending to heaven for Huawei to go public, and Old Master Ren and the others have never planned to go public.

Old Master Ren said with a smile, "In terms of equity incentives, Huaxing is the same as our Huawei, sharing the company's huge profits with them, but the laboratory part is more aggressive. This may be the reason why so many excellent researchers have joined."

In Huaxing Technology's equity structure, Lu Haifeng uses the same shares with different rights and a consistent action agreement, and has the right to veto.

Huaxing Technology seems to have distributed all the equity, but in reality, most of it is still in Lu Haifeng's hands. The distributed equity will continue to be diluted in the future. Of course, these are all virtual dividend shares, not actual shares.

After all, more excellent employees will join in the future and receive share allocations after contributing to the company. These are all allocated by the Huaxing Employee Committee, while researchers are allocated by the Huaxing No. 2 Laboratory Technical Committee.

And this set of employee incentive policies was finalized after a long period of research by the Legal Department.

After all, if you want those capable and ambitious elite talents to keep working for you, dedicating their lifelong experience and efforts, and treating the company as their own home, you must give equal or even exceeding value in exchange. Otherwise, talking about ideals is just playing tricks. Without benefits, you can't keep real elite talents.

Therefore, Lu Haifeng will share the company's huge dividends with these elites. Only with benefits can this group of people be firmly united together and work hard together.

Furthermore, if Huawei hadn't used this special incentive system from the beginning, it wouldn't have reached where it is today, and it wouldn't have become a major concern for the beautiful country in the future, forcing them to use state machinery to suppress it.

Huaxing Laboratory has applied for 21,341 patented technologies in less than two years since its establishment. Now, several patents are born every day. In addition to the cheating of Laboratory No. 1, the others are largely related to the researchers' crazy research on various things like they have been injected with chicken blood every day.

Huaxing No. 2 Laboratory also has a unique rule, the interest group system.

For example, there are three technical nerds who like old anime from the 1980s or even earlier, but those old anime have very worrying picture quality due to their age. Therefore, the three of them formed an interest group, claiming to develop a rendering engine specifically to make up for the lack of color and picture detail in early anime works.

Even so, Huaxing No. 2 Laboratory actually approved some money for them, and they can also use supercomputers as rendering servers. Therefore, these three technical nerds started to study the rendering engine in their spare time.

If it were another boss, he would not approve such a strange research project at all. After all, Huaxing Technology is not an animation company, and rendering will not bring any benefits to the company.

Based on the principle of profit first, employees should work more than cows, get up earlier than chickens, and sleep later than dogs to create more value for the company.

However, Huaxing No. 2 Laboratory is completely different. They not only have an interest group system, but even their working hours are free, but their salaries are linked to their contributions.

Otherwise, Lu Haifeng would not have been able to complete the research and development of so many core patented technologies in two years with just Huaxing No. 1 Laboratory, even if he had a system.

No matter how talented a person is, their energy is limited. There are only twenty-four hours in a day, and the people in Laboratory No. 1 cannot engage in research day and night.

Until now, Huawei has surprisingly discovered that Huaxing Laboratory is also top-notch in the fields of communication baseband, semiconductor manufacturing, lithography technology, and cloud computing. Previously, it could only produce Kunpeng chip processors and Zhulong chip processors.

What really makes Old Master Ren and Huawei executives pay attention is Huaxing Technology's entry into the low-end mobile phone market. Huawei's next strategic step has already targeted the low-end mobile phone market, and it has already established a sub-brand, Honor. It is impossible for them to give way.