Recently, Alibaba Group released an internal email saying that the performance and annual incentives for the new fiscal year have been launched。In order to improve the certainty and liquidity of employee compensation income, from April 1, the Group will upgrade the employee equity incentive plan from both equity incentive tools and vesting rhythm.。

1, incentive tools: from April 1, the newly granted performance, promotion stock adjustment to "stock + long-term cash" combination, each business will be based on their own situation to develop their own policies.。

Previously, newly granted or promoted employees could only choose the stock grant model in addition to salary increases。Today, in addition to a one-time year-end bonus and equity, will also introduce "long-term cash," employees can choose pure long-term cash, stocks and long-term cash + stocks three forms, the specific distribution ratio is temporarily unknown.。

Beginning at the end of 2020, Ali's share price fell from a high of $330 to a recent $70 or so and has been hovering at a low level for a long time.。For employees, the depressed share price limits the incentive effect of the original long-term bundle。

For example, for a P7 who joined the company at the end of 2020, if he had 400 Ali shares at the time of joining the company, his average annual stock value would be around 230,000 yuan (RMB, the same below); and to the recent $70 / share share share price, the annual share price would drop directly to 4.$90,000, with revenue significantly dragged down by stock price volatility。

By launching the "equity + long-term cash" combination, Ali can not only attract employees who are interested in cash income, but also keep employees who are optimistic about Ali's future development, and improve the flexibility of recruitment.。However, while incentivizing the upgrade, Ali will send more cash directly to employees in the future.。

2. Rhythm of vesting: After April 1, the vesting and distribution frequency of newly granted shares and promoted shares will be accelerated from 1 / 4 per year to 1 / 16 per quarter.。

All along, long-term equity incentive is a common incentive used by the Internet factory, employees get option shares year by year, not only to maintain the stability of the team and the enthusiasm of employees, but also for the company to retain sufficient development capital.。

Previously, only employees of Ali Group who were employed at or above the rank level were allowed to acquire equity, and they could exercise their rights after one year of employment.。Thereafter, in addition to salary increases, additional stock grants are granted over four years at a uniform rate of 1 / 4 per year, but employees who have been employed for less than one year do not receive any equity vesting.。

And this incentive upgrade closes the loophole, so that employees benefit more, do not have to worry about less than a year after the stock grant to leave and do not get money, but also improve the liquidity of employee income.。

However, based on the content of the email, it is not yet possible to determine whether the four-year stock granted to new employees at the time of entry (50% for the full two years and 1 / 4 for the third four years) is also implemented in accordance with this system.。

Regarding the change in incentive policy, an Ali employee commented: "The original stock does not apply to the new rules, but if you change jobs or are laid off, the loss will be smaller, better than nothing."。"

It is said that Ali's major adjustment is aimed at attracting and retaining talents and enhancing competitiveness at the human resources level.。For the impact of the adjustment, industry insiders pointed out that the adjustment can achieve "kill two birds with one stone" - on the one hand, employees can get incentive income earlier, spread to the quarter, enhance the range and certainty of quarterly wages; on the other hand, it can also reduce the impact of stock price fluctuations on employee income.。

The following is the original internal mail:

FY24 performance and annual incentives have been launched, and the new fiscal year is approaching。In order to improve the certainty and liquidity of employee compensation income, the Group has made several adjustments to Alibaba's (AGH) equity incentive policy, and hereby communicates with you。

I. Adjustment of incentive tools

From April 1, 2024, the newly granted equity incentive for performance and promotion will be adjusted to the combination of "equity + long-term cash."。Each business will develop its own policies according to its own circumstances。

II. Adjustment of attribution rhythm

New performance and promotion awards from April 1, 2024 will accelerate the frequency of vesting and issuance, from the original annual vesting to quarterly vesting, with 1 / 16 of each full quarter vesting。

The above communication applies to businesses that use Alibaba (AGH) equity incentives。