With the application of initial public offering (IPO) submitted by the Hong Kong Stock Exchange in May 3rd, a widely watched movement to create wealth has also begun. This will be the worlds largest listed transaction this year, and is the first time that Private Companiess mysterious financial data is publicly available. In 2017, the sales revenue of millet has exceeded 100 billion yuan, and more than 1/3 of the employees hold options. At the moment, the valuations of millet in the first level market are very heated, investors use the 3.5 times P/S (market rate) in 2017 to estimate the value of millet, about $62 billion, and if millet is seen as a Internet Co, it will be able to sprint the market value of $100 billion. If you can achieve the target of 100 billion market value, then millet holdings only, the founder of millet group, the chairman of the board and chief executive Lei Juns wealth will reach $31 billion 400 million (about RMB 199 billion 200 million yuan), he will be second only to Ma Huateng, Ma Yun, Li Jiacheng of Chinas fourth richest, several joint founding Peoples property will also be more than 1 billion dollars (about 6 billion 300 million yuan), and thousands of employees may become multimillionaire. Gao Lei, a former employee of millet, told www.thepaper.cn reporters that some millet employees who entered the job before the beginning of 2012, which were within 1000 and still on the job, could be free of wealth. Some super shareholders may have millions of shares of millet stock. For more ordinary employees, it is a question whether they can survive the early start-up period of the company and resist the temptation of subsequent exercise. Lei Jun accepts the receipt of millet IPO application by the Hong Kong Stock Exchange Millet staff wealth is slightly higher than the other China Internet Corporation, in addition to the general equity incentive, mainly because of the early thunder army to improve the cohesion of employees, generously sell the company shares, let employees voluntarily hold the stock. Those who bought shares in the company are now making money. In August 4, 2017, in an event held in cis capital, the Lei Jun revealed that millet was in the early stages of allowing employees to make a flexible allocation between stock and cash as their own salary. After a voluntary choice, 15% of the people chose to take all the cash pay per month, 70% of them took 70%-80% cash and a few stocks, and 15% had only a little living expenses but more stocks. Lei Jun said, so employees have entrepreneurial mentality, devote themselves to making money is their own decision-making, who will not complain when they lose. In 2012, when millet B financing, Lei Jun also allowed employees to invest their own money, each caps 300 thousand yuan. At that time, there were more than 70 people in the company, almost 60 out of the money and a total of 14 million yuan. Lei Jun said. Lin Bin, President of Xiaomi, also bought shares of his company from his own pocket. Several co founders of millet basically hold about 3%, while Lin Bin holds 13.3%. In 2010, Lei Jun pulled me to start a business, I promised zero wages, and asked if I would like to pay for my own investment in millet, I hesitated. But after thinking about it for a few days, I decided to discuss with my wife. We are preparing for a few years of hard life. I sold all the stocks of Google and Microsoft to millet. Lin Bin revealed in his speech at his alma mater, Zhongshan University, in 2015. Millet executives hold. Prospectus disclosed that as of March 31, 2018, a total of 14513 employees of millet, 5500 employees have a share based reward. This means that at least 1/3 of the employees have options. An option refers to an employees right to buy shares at the current price, and the difference is calculated at the time of settlement. By the end of 2017, nearly 190 million shares of millet had not been exercised, and the average exercise price was $1.05. If the current market estimates the IPO price of $40 per share (the same, except for special instructions), these options will give employees 7 billion 400 million dollars (about 47 billion yuan). Roughly speaking, the 5500 employees can get an average profit of 1 million 350 thousand dollars (about 8 million 570 thousand yuan) after the listing of millet. According to Lei Jun, when I started millet, many people in China did not earn money on options. Especially those who absorb hardware are talents, no one believes that stocks are valuable. Lei Jun thinks, millet creates a miracle behind the whole set of incentive system is related, millet elasticity of the reward system, plus voluntary investment behavior, make the company in the initial stage of a strong cohesion. Of course, as CEO, I am under great pressure, so the staff came to the office and asked me, how is our company doing now? A lot of non - technical employees have no options today. However, not everyone can get so many options. It is not easy to get the option of millet. Gao Lei told surging news reporters that only employees who joined millet technical posts in 2014 or earlier, asked for lower salaries, and the more options, the more or less options, both the graduates and the society, they were basically able to take 5000 to 20000 shares, and they all said to the stock price. Ali is so tall that few people convert it into cash. But not every employee who joined millet earlier had options. Gao Lei said many non-technical staff have no options. Only when employees rank similar to those of Ali P7 can they have options, not much, about 5000 shares, and five years exercise. Only big coffee Daniel is said to be able to hold millions of shares, and their work number is less than 1000 and on the job. Other employees have few general options, even if 1000 workers are not able to be rich and free. Gao Lei revealed. Chen Yizhi (a pseudonym) told reporters, millet early poor recruitment, so the option is very high, some ordinary employees may have 200 thousand shares. However, by 2015, the growth rate of Xiaomi began to slow down. Li Wanqiang, the founder of millet co - founder of Bloomberg, said that in 2016, his former stay up the night became all night. Occasionally, he took a rest, drank a beer, took a roast and smoked. Analysts are looking at the millet. At that time, millet maintained its operation on loan instead of seeking venture capital because it would face the risk of downvaluation. The prospectus showed that 2015 was the only year for millet to exercise an option in nearly three years, and some millet employees exercised 4507719 shares at $0.14 for $631 thousand and 100 (about 4 million yuan). Before 2015, millet had exercised two or three times at a price of several US dollars. Chen Yizhi disclosed, Lei Jun has always stressed that not listed within five years , not everyone can wait. But now I think the employees who sold the stock now have to regret it now. The average salary of employees is only 160 thousand yuan per year? In fact, in addition to options, millet also has two types of equity incentives. One is restricted stock. Restricted stock is the stock that the company grants you, but you need to reach a certain number of years of work, or achieve a certain work goal, to unlock the stock and get the benefit from it. By the end of 2017, millet had unlocked restricted stocks of 22 million 210 thousand shares, with an average buying price of $2.46, and 24 million 500 thousand unlocked shares, with an average cost of $2.94. According to this calculation, in addition to the benefits created by options, restrictive stocks can unlock all of them and bring about 1 billion 400 million dollars (about 8 billion 900 million yuan) for employees, which will create a large number of millionaires among their millet employees. Another category is millet Development Fund for some invited employees. If employees leave within five years after the investment, they can only charge the principal and interest of the initial investment. If you can stay for five years, you can become a holder of the rights and interests of the fund. Thereafter, he may require millet to repurchase shares at fair value. During the 2015-2017 years, the related fees identified in the millet profit statement were 69 million 100 thousand yuan, 57 million 370 thousand yuan and 100 million yuan respectively. Besides the equity incentive, the salary of the pure cash portion of the employees is not high. The prospectus shows that Millets wages, salaries and red (Bonus) expenses in 2017 are 2 billion 428 million yuan (excluding social security benefits, housing welfare, etc.), equivalent to the annual salary of 167 thousand and 300 yuan per year for each employee. Salary and welfare of millet staff. This prompted market participants to question whether the company was able to whitewash its earnings by lowering wages but increasing options before listing. Chen Xin, a professor at the Shanghai Jiao Tong Universitys Shanghai Senior Finance Institute, told reporters that millet paid 2 billion 30 million yuan, 2 billion 830 million yuan and 4 billion 50 million yuan for employees in 2015-2017 years. The share based pay expenses were 690 million yuan, 870 million yuan and 910 million yuan respectively, accounting for 34%, 30.8% and 22.5% of the staffs salary and welfare expenditure respectively. This shows that in the early days, millet preferred to give more incentive to employees in order to enhance the attractiveness of excellent employees, but less in 2017. According to this data, the accounting method of millet is reasonable. Chen Xin said. In fact, it is also a common practice to encourage employees to spend a lot of cash in the cash growth period by using option to motivate employees. The highest paid millet person is not Lei Jun. The prospectus revealed that the top five top pay people in the former millet paid 196 million yuan in 2017, including wages, salaries and flowers of 8 million 148 thousand yuan, and the option expenditure of 187 million 572 thousand yuan. On average, the top five executives do not calculate the average annual salary of the option over 1 million 600 thousand yuan, and the average annual salary of the option is nearly 40 million yuan. Millet also listed the distribution of the total salary of the 5 high paying people. In 2017, there were 1 people with a annual salary of 100 million to 150 million yuan, and 2 people with a annual salary of 30 million to 100 million yuan, and 2 people with a salary of 100 million to 300 million yuan a year. However, the prospectus says the 5 are not directors of millet group. According to the arrangement of millet, the directors remuneration was zero during the three years from 2015 to 2017. Of course, the Lei Jun through its 31.41% millet shares, the family can reach 22 billion -314 billion dollars, about 140 billion -2000 billion yuan (in accordance with the millet 70 billion -1000 billion dollar valuation interval calculation). In addition, in accordance with the boards arrangement, in April 2, 2018, millet also issued about 64 million shares of B common shares to the SmartMobileHoldings controlled by the Lei Jun as a reward for the Lei Juns contribution to millet by 0.000025 dollars. At a price of $40 per share, the value of the reward is about $2 billion 560 million (about 16 billion 200 million yuan). In terms of financial accounting, Professor Chen Xin believes that the directors of millet do not have to get rewards from salary, but reduce the management costs of the company, but it doesnt seem to be the case. Not to mention whether it is reasonable for the company to grant Lei Jun such a huge salary before going public. If it is to repay the Lei Juns contribution to millet, then according to the ratio principle of accounting income, this cost should be reflected in the previous years of equity incentive costs, and the previous millet business income corresponding. But millet will postpone the cost of the company after the listing (the second quarter of 2018), will greatly underestimate the pre listed executives pay, which is of course good for the company, but may let investors misjudge the companys real profitability. Chen Xin said. The source of this article: surging news editor: Wang Fengzhi _NT2541 In addition, in accordance with the boards arrangement, in April 2, 2018, millet also issued about 64 million shares of B common shares to the SmartMobileHoldings controlled by the Lei Jun as a reward for the Lei Juns contribution to millet by 0.000025 dollars. At a price of $40 per share, the value of the reward is about $2 billion 560 million (about 16 billion 200 million yuan). In terms of financial accounting, Professor Chen Xin believes that the directors of millet do not have to get rewards from salary, but reduce the management costs of the company, but it doesnt seem to be the case. Not to mention whether it is reasonable for the company to grant Lei Jun such a huge salary before going public. If it is to repay the Lei Juns contribution to millet, then according to the ratio principle of accounting income, this cost should be reflected in the previous years of equity incentive costs, and the previous millet business income corresponding. But millet will postpone the cost of the company after the listing (the second quarter of 2018), will greatly underestimate the pre listed executives pay, which is of course good for the company, but may let investors misjudge the companys real profitability. Chen Xin said.