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Employee Stock Ownership Plan (ESOP) – Huawei’s Double-edged Sword (Chinese and English versions)

Will Huawei’s ESOP act as CEO Ren’s fetters despite its contribution to the Huawei success story? What should Huawei do next? List on the stock market?

The Employee Stock Ownership Plan (ESOP) has had a very positive influence on the history of Huawei, but has also been subject to public suspicion at every turn. Employee benefits have been accrued alongside Huawei’s impressive development and have generated huge amounts of human capital. However, with ESOP’s continual expansion, the diminishing space for such a scheme, and the changing market environment, the risks and drawbacks of ESOP have been slowly exposed. How exactly do these drawbacks threaten a drop in performance? Will ESOP act as CEO Ren’s fetters despite its contribution to the Huawei success story? What should Huawei do next? List on the stock market?

Case advisor: 
Xiang Bing
Case writer: 
Yang Yan
Keywords: 
HR management, shares, public listing