With the e-commerce firm announcing cuts to executive pay to fund benefits for its frontline workers, JD.com has signaled its commitment to implementing Beijing’s new policy.
What Happened: E-commerce giant JD.com is to cut top executive pay at the company starting from the first day of 2023. Senior management at the firm will have their salaries reduced by 10–20 percent, with the highest earners taking the biggest cut. This will affect 2,000 employees at the deputy director level and above.
Founder Richard Liu announced the move in an email to all employees on November 22. In it, he apologized to those with salary cuts and explained further that the money will be redistributed to front-line employees at the firm. The business, which employs around 540,000 people, will be giving more benefits to some employees and contractors such as their 100,000+ express delivery drivers who currently don’t receive social security contributions from the company. This will also change in 2023. Liu also declared that he would donate $14 million (100 million RMB) to a fund helping dependents of employees who were majorly disabled or had died on the job.
The Jing Take: This push for better wealth redistribution at one of China’s biggest tech establishments is an explicit response to the government’s call to promote “common prosperity.” President Xi Jinping first introduced the phrase in August 2021 but it has been reiterated at key events such as this year’s Party Congress. It pledges to regulate excessively high incomes and encourage people and companies with large revenues to give back to society in efforts to reduce income inequality in the country.
The public response to JD.com’s move has been, predictably, overwhelmingly positive online. One Weibo user remarked, “why is he (Liu) full of vision and generosity? Because he was born in the countryside. He does not forget where he came from”; the statement received more than 31,000 likes. Some netizens praised the company for being “responsible” while others offered positive comparisons to its main competitor: “much better than a certain Ma,” read one post in reference to the Alibaba founder. Continue to read the full article here