Alibaba freezes pay rises for executives amid China’s big-tech crackdown

Chinese e-commerce giant Alibaba Group Holding has frozen pay raises for senior executives in 2021 and is instead giving junior staff bigger salary increases, sources said, in an effort to preserve its workforce amid a regulatory clampdown.

Hundreds of top-tier executives at Alibaba are not entitled to salary hikes this year unless they performed extraordinarily, four sources familiar with the matter said.

“Talent is Alibaba Group’s most important asset. We have a robust and competitive compensation system that reflects our priorities in cultivating our next generation of talents,” Alibaba said in a statement to Reuters. It did not directly comment on the pay freeze for executives.

Alibaba, which employed more than 252,000 staff as of 2020, usually decides pay rises for most individuals in April.

The Hangzhou-based company has still offered considerable pay rises to junior staff, said the people, declining to be named as they were not allowed to speak to media.

The pay moves mark a departure from the usual for Alibaba, which has been the focal point of China’s months-long crackdown on the mainland’s big and powerful technology companies on worries about their market dominance and ability to sway public opinion.

Its management level executives, over the years, received on average a 5 percent to 10 percent pay rise annually and were also given stock incentives, one source said.

In a statement to Reuters, Alibaba did not directly comment on the pay freeze for executives, but said: “Talent is Alibaba Group’s most important asset. We have a robust and competitive compensation system that reflects our priorities in cultivating our next generation of talents.”

The sources declined to be named as they were not allowed to speak to media.

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.

The Alibaba 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 (SAMR) has taken aim recently at China’s large tech giants in particular, mirroring increased scrutiny of the sector in the United States and Europe.

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