Chapter 3236 Reformer

A lot of people have actually mentioned the change in the salary system to Zhou Buqi.

Especially Tang Binchen, Xu Liangjie, and Zheng Xiaoli, all of them have doubts about the existing salary system of Ziweixing International.

At least it should be the same as Ziweixing!

However, for the sake of conservatism, Zhou Buqi has been reluctant to agree. In other words, he hopes to "kill with a borrowed knife" instead of going into battle himself, and let Chinese executives such as Tang Binchen or Xu Liangjie come forward to solve the problem, which will make them offend people.

It would be best to let Kurian come forward!

Ziweixing and Ziweixing International use different salary systems, and the core difference lies in the way stocks are granted.

Ziweixing in China adopts a unified "option system".

Ziweixing International overseas adopts the "equity system + option system".

The option system is a subscription strategy.

For example, an employee signs a labor contract for 4 years and 10,000 shares of options. In other words, when the contract is over for 4 years, he can get 10,000 shares of options.

These 10,000 options need to be exercised before they can be turned into stocks that can be sold.

The trick lies in the strategy of exercising options.

Exercise means buying low and selling high.

Four years ago, when he joined the company, the stock price was $100; four years later, when his contract expired, the stock price was $200.

In this way, he can exercise the option at the price of $100 when he joined the company, and buy 10,000 options, spending a total of $1 million, but the actual stock value is $2 million.

It is equivalent to getting a real incentive of $1 million.

If the stock price falls during the four years...

Then there is no value in exercising the option, you can't buy high and sell low, right?

Therefore, the underlying logic of the option system is to encourage employees to work hard, improve performance, work together to improve performance, and then raise the stock price. Only when the stock price rises, the option is valuable. If the performance is not good and the stock price falls, then everyone's interests will be damaged.

The equity system's compensation plan is also a stock reward, but there is no exercise mechanism.

That is, in the labor contract, it will be indicated that stocks will be directly issued to employees, for example, a 4-year contract will award 10,000 shares of stock. In this way, employees do not need to spend money to exercise their rights. As long as the contract expires, employees can get these 10,000 shares of stock.

Whether the stock price rises or falls sharply, employees can get these 10,000 shares of stock steadily.

This incentive attribute is much weaker.

Even if the performance is very poor and the stock price falls sharply, employees can still get stocks. There is a lack of a "prosperity and loss together" relationship between the company and employees, and the incentive effect on performance will be very poor.

In China, Ziweixing adopts option incentives.

Ziweixing International is different. Most of them are option incentives, but some executives, middle-level and senior scientists use equity incentives.

Because for employees, they prefer equity incentives.

They can get stocks safely and steadily, rather than taking performance risks.

In short, the option system is more in line with the interests of the company, and the equity system is more in line with the interests of employees.

If you want to attract some top talents in the industry to join, it is better to adopt the equity system.

Ziweixing is the first choice for domestic talents, so the option system is fine. Ziweixing International is not so attractive in Silicon Valley, so it has to partially adopt the equity system.

Kurian is a new CEO.

He must make three big moves.

Kurian said in a deep voice: "In the past few years, Ziweixing International was just a start-up company. It was difficult to compete with Microsoft, Apple, Google, Amazon, Oracle and other technology giants for talent. So in the recruitment of some outstanding talents, we can only adopt the equity system. This strategy is right, which can effectively attract a group of top industry talents for the company."

Zhou Buqi smiled and said: "What is your salary plan? Options or equity?"

"Equity." Kurian jumped from Oracle. In order to attract him to join, in addition to career ideals, the salary cannot be vague. "Although I got equity incentives, this does not prove that equity incentives are the most suitable way now."

Zhou Buqi nodded, "Well , now Ziweixing International is already a giant in the industry. I looked at the market value rankings, Apple's market value is 760 billion US dollars, Google's market value is 380 billion US dollars, Microsoft's market value is 320 billion US dollars, and Ziweixing's market value is 290 billion US dollars. Then there is Ziweixing International, with 250 billion US dollars, which is the fifth in the world in the Internet industry. "

Kurian said: "Yes, we are already a world-class company, and our attraction to talents can be compared with giants such as Apple, Microsoft, Google, and Amazon. But our salary system is still at the stage of a startup company. Now Ziweixing International is a large listed company, and we need to make timely adjustments to the salary structure. "

This is the reform that Zhou Buqi has been looking forward to for a long time.

Just waiting for Kurian to take office and put the responsibility of this reform on his head.

As long as it is a reform, it will definitely offend people.

It's written in history books.

Reformers are all dead, and they are beheaded at any time. A few of them were not killed, but they suffered the same disaster after death. For example, Wang Anshi was known as the most treacherous minister in the Song Dynasty; for example, Zhang Juzheng was exhumed and his corpse was whipped and his bones were crushed and scattered after his death.

Changing the equity system to the option system will inevitably offend a large number of executives.

This kind of thing is not suitable for Lu Qi, Xu Liangjie or Tang Binchen to do. It is most suitable for Indians to take the lead.

If Tang Binchen is appointed as CEO, it will be very dangerous, which is equivalent to boss Zhou personally ending his life; if Kurian is appointed as CEO, even if he messes up, Zhou Buqi can take the blame and find another CEO.

Unexpectedly, even before Zhou Buqi made the request for reform, Kurian volunteered.

What a qualified CEO!

Zhou Buqi thought about it for a moment and said slowly: "The existing salary system is indeed unable to keep up with the development of the company. However, the reform must be cautious and advance slowly, and do not make drastic changes at the beginning, so as not to cause excessive backlash. , causing turmoil in the company’s internal order.”

Kurian smiled and said: "The adjustment of the salary system is a good thing."

"Good things do not necessarily mean good reforms." Zhou Buqi told him about history, "Reforms are for getting better and better, not for creating chaos. There was a dynasty in the history of our country, and there was a reformer named Wang Anshi. All of his reform strategies were good from a modern perspective, but when implemented, they caused huge chaos in the country and reused a large number of corrupt and traitorous officials who reaped the dividends of the reform. , directly led to the invasion of foreign enemies, and both emperors were captured. "

Kurian agreed, "I will not completely deny the equity system, which will indeed cause instability. First of all, I will not attack those senior scientists. They do not need to be responsible for performance. Their contracts will always be equity incentives." plan."

"good."

Zhou Buqi agreed.

Kurian continued: "Second, separate the middle management from the senior management. All middle management must have a stock option system. Whoever does not agree will be fired. Through this method, a group of people with low morale can be eliminated. The middle level should inject new vitality into the company. The current situation in the company has seen a lot of laziness and laxity, and many people have become slack. A group of people must be killed, and a group of influential people must be killed to improve the situation. Boost morale.”

"Can."

Zhou Buqi was secretly surprised.

I feel that this Indian is very powerful, and I feel that he is also a master of "Zi Zhi Tong Jian". Is it possible that India also has similar power-based books?

Kurian said: "Third, for the senior management, stability must be the priority. These outstanding executives may receive calls from headhunters every day, and they have no worries about finding a new job. Therefore, we need to be more tolerant towards this group. We cannot Abolish the shareholding system across the board.”

"What do you want to do?"

"I think we can cut the past equity into two halves. One half is still an equity system, and the other half is an option system linked to performance. This plan will be relatively smooth and will not have too much impact on the interests of executives. The impact.”

"Yeah?"

Zhou Buqi is not sure.

Kurian took out a document from the folder beside him and handed it over. "This is the new salary plan. I think it is relatively smooth. I have also talked to some executives and there is no obvious backlash." sign."

Zhou Buqi took the file.

Here is a comparison of the old and new compensation packages.

In the past, executive compensation mainly consisted of three parts, fixed salary, annual bonus and equity incentives.

Fixed salary, accounting for 7.6%.

Annual bonus, accounting for 19.4%.

Equity incentives account for 73%.

It can be seen that in the compensation of executives, what they earn is not wages at all, but stocks.

The new plan splits executive compensation into four parts, with fixed salary accounting for 7.6% and annual bonus accounting for 19.4%.

There is no change in this part of cash payment.

What has changed is that the equity incentive, which accounts for 73% of the total package, has been split into two.

36.5% of them adopt equity incentives. The remaining 36.5% uses option incentives.

The change is not too big.

Zhou Buqi looked at it for a minute and agreed, "Well, this plan is quite smooth."

Kurian said: "In the past plan, if the performance of the executive was not good, the annual bonus would be lost, and the executive's general contracting income would be reduced by about 20%. In the new plan, if the performance is not up to standard, the general contracting income will be reduced by 56% %, which is more than half. Although the changes in the plan are small, the incentive effect of the new plan can be obvious. A 20% reduction in annual income is nothing to the high-income group, but a reduction of half may be a problem for many people. I can’t even pay the loan bill.”

Zhou Buqi was very satisfied and said with a smile: "I have no problem here. What about the remuneration committee? Have we discussed it?"

"This is the third thing I want to talk to you about."

"oh?"

"Our chief financial officer does not support reform!"

Kurian couldn't help but sneer.

"Um?"

Zhou Buqi raised his eyebrows.

Chief Financial Officer Curtis is a white uncle in his fifties.

Kurian said loudly: "I want a new CFO!"

Zhou Buqi asked: "Who should I change?"

Kurian said: "Financial Director Ms. Wormud, my salary plan was made together with her. We need to appoint a financial officer who supports reform and puts the company's long-term interests first, rather than sticking together to defend Self-interested devil.”

"Can!"

Zhou Buqi reciprocated the favor.

There is only one last chapter left in this book and it is over.

The new book "After Rebirth, I Became a Great Master" has been released. The protagonist changed from Boss Zhou to Mr. Zhou. Back to 1996, the Internet had not yet emerged, and it started with TV stations.