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Having fallen by more than 10% of its share price in China in the past week, LeEco CEO Jia Yueting issued an internal letter to his employees on Sunday, stating that the company has been expanding “too fast” and its capital and resources had not kept pace as they “burned money in upscaling efforts”.
Jia is also placing himself in the group as he reportedly offered to take a salary of one yuan per year for life.
The internal letter came in response to growing concerns plaguing the Chinese tech group, which has expanded into smartphones, smart TVs and self-driving vehicles. One of the concerns is the falling share price of LeEco’s Shenzhen-listed arm, regardless of dramatic announcements from the company that include the lukewarm unveiling of a self-driving electric car, new smartphones and TVs in San Francisco last month.
Jia says that “LeEco’s growth pace and organisational capabilities” have been a problem, according to the letter obtained by the Global Times. He noted that the Shenzhen-based company’s globalisation had gone too far despite limited capital and resources, resulting in “an apparent lack of momentum” in various businesses.
He admitted the cash problem has affected the company’s handset business.
He also directly refers to a series of companies (ones which are “non-listed” LeEco companies separate from those which are listed on the Shenzen Stock Exchange) that are part of his private subsidiaries as the main reason for the less than desirable standing, and he puts management at the forefront while mentioning that they should be held responsible for the missteps.
Some have criticised Jia’s one Yuan salary as a “publicity stunt,” as Jia has massive holdings publicly and privately in LeEco. “He doesn’t need a salary, and could well be paid just as well in stock, bonuses, and benefits,” one commenter said.
In Silicon Valley, a number of top executives and CEOs have worked for an annual salary of US$1, including Mark Zuckerberg, founder of Facebook and Larry Page, CEO of Alphabet.
The story was first reported in marketing-interactive.