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China's Geely plans staff share award scheme in 'common prosperity' push

China's Geely plans staff share award scheme in 'common prosperity' push

FILE PHOTO: A building of the Geely Auto Research Institute is seen in Ningbo, Zhejiang province, China August 4, 2017. REUTERS/Aly Song/File Photo

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 3.56per cent 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 HKUS$264 billion (US$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 (US$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.

(US$1 = 7.7869 Hong Kong dollars)

(Reporting by Yilei Sun and Brenda Goh; Editing by Toby Chopra and Susan Fenton)

Source: Reuters


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