Under-pressure e-commerce giant Alibaba has ditched pay rises for its executives this year and will instead hand the extra cash to its junior staff.
The move, sources say, is an attempt by Alibaba to ensure it holds on to its workforce as it comes under increasing regulatory scrutiny.
Hundreds of top-tier executives at Alibaba will not be entitled to salary hikes this year now, unless they performed extraordinarily, sources claimed. The Hangzhou-based company, though, has offered considerable wage increases to junior staff, they said.
The pay shift marks a departure from the usual for Alibaba, after it became a target in Beijing’s crackdown on the country’s powerful technology companies over worries about market dominance and their ability to sway public opinion.
Its management level executives, over the years, had received on average a 5% to 10% pay rise annually and were also given stock incentives, one source said.
Alibaba's Hong Kong-listed shares fell more than 2.5% on Friday, in line with a weak broader market.
Alibaba, which runs businesses from e-commerce to cloud computing to logistics to entertainment, employed more than 252,000 staff as of 2020. It usually decides pay rises for most employees in April.
But the business empire has come under intense scrutiny in China since billionaire founder Jack Ma's stinging public criticism of the country's regulatory system in October.
It was fined a record 18 billion yuan ($2.78 billion) earlier in April after an anti-monopoly probe found the e-commerce giant had abused its dominant market position for several years.
China's State Administration for Market Regulation has taken aim recently at China's large tech giants in particular, mirroring increased scrutiny of the sector in the United States and Europe.
- Reporting by Reuters