[DigitalToday reporter Hyunwoo Choo (추현우)] Chinese AI and semiconductor companies are rolling out large equity incentives in succession to prevent key talent from leaving. The Hong Kong South China Morning Post reported on Friday that recent corporate disclosures include unusually large stock rewards, ranging from free share grants to compensation plans covering most employees.

The companies are focusing on retaining key staff for the long term by using a recent bull market, as competition to scout talent in China and U.S.-China technology rivalry intensify.

In semiconductors, AI chipmaker Cambricon Technologies vested nearly 600,000 shares to 124 key employees early this week. The average value per person was 5.57 million yuan, based on the share price on the announcement date. Last month, it granted 5 million shares to 944 people under an incentive plan that applies through 2028. The plan covers 85.3 percent of all employees.

The reward size per individual was larger at Zhongji Innolight, which makes optical transceivers for AI data centres. In a recent vesting process, the company allocated 2.48 million shares to 99 people, including senior executives, middle managers and key technical staff. The average value per person exceeded 26 million yuan, based on the share price on the April announcement date.

By coverage, semiconductor equipment maker AMEC was the broadest. Its restricted stock plan disclosed in March targeted more than 97 percent of all employees. Moore Threads, a Beijing-based graphics processing unit developer, also included 1,080 key staff in an incentive programme in April. That is about 85 percent of its total workforce. At ChangXin Memory Technologies, founder Ju Yiming will provide 768 million shares, equal to 50 percent of a partnership stake, for employee incentives over the next 10 years. He excluded himself from the recipients.

AI companies are using pre-IPO equity and free grants. Zhipu AI, which listed in Hong Kong this year, created two equity holding platforms in 2021. One is for key employees, and the other is mainly for external advisers. The platform for key staff includes 426 people and holds a 9.8 percent stake after the listing. The average holding value per person exceeds 100 million Hong Kong dollars at recent share prices. The external adviser platform has 25 participants, and the average holding value per person is close to 1.3 billion Hong Kong dollars.

MiniMax chose to give shares without performance conditions. When it announced its first stock incentive plan after listing in June, it granted 1.16 million shares for free to key staff and service providers. The reward vests once recipients meet a service period ranging from a few days to several years, with no performance targets.

Chinese big tech companies such as Tencent and Alibaba are also revamping compensation systems. Tencent said last week it would distribute more than 38.6 million shares to employee participants under a compensation scheme introduced in 2023. That equals 0.42 percent of total shares outstanding. Alibaba said in May it increased the share of long-term cash incentives, taking into account the macroeconomic environment and broad trends in the talent market. Stock-based compensation expense for the March quarter was 3.1 billion yuan, down 10 percent from a year earlier.