(Image credit: CnEVPost)
Li Auto (NASDAQ: LI) rewarded employees with large year-end bonuses as the company reached its originally planned sales target for 2023.
Li Auto employees will receive year-end bonuses of between 4 and 8 months' salary in 2023, an amount that is significantly higher than the industry's traditional year-end bonus of 2 months' salary, local media outlet Jiemian reported today.
Rumors circulating on a Chinese career social media platform yesterday claimed that Li Auto will pay out large 2023 year-end bonuses.
Li Auto's founder, chairman and CEO, Li Want, later indirectly confirmed the award on Weibo, saying the company could not just learn from Huawei's processes without learning from Huawei's sharing of benefits.
"(We exceeded our target in) 2023, so we give out more bonuses. (We didn't reach the target in) 2022 so we pay less bonus, to make the reward and punishment clear," Li said.
"Only learning advanced processes, not advanced benefit distribution, and not separating rewards and penalties is the biggest cause of organizational inefficiency," he added.
Li Auto delivered 376,030 vehicles in 2023, a year-on-year growth of 182.21 percent, to reach its sales target of 300,000 units. The company is aiming to challenge annual sales of 800,000 vehicles in 2024.
Li Auto delivered only 133,200 vehicles in 2022, missing its sales target of 170,000 units.
While Li Auto offered employees large 2023 year-end bonuses, the attitude of the company's insiders appeared cautious and conservative regarding the 2024 bonus outlook, Jiemian's report noted.
Some believe that the generous 2023 year-end bonus is in part Li Auto's way of compensating for a lower 2022 year-end bonus, the report said.
On the other hand, Li Auto has set challenging goals for 2024, with an annual sales target of 800,000 units and a monthly target as high as 100,000 units, the report noted.
In 2022, most of Li Auto's employees received a year-end bonus of half of their monthly salary, or even less, as a result of failing to meet the sales target, according to Jiemian.
Additionally, Li Auto's performance appraisal system has been described by insiders as harsh, with 20 percent of its employees being rated as failing each quarter, a percentage much higher than the industry average, the report said.
This not only has an impact on employee morale, but also has an indirect effect on their year-end bonuses and future salary increases and promotions, according to the report.