Alibaba's Logistics Arm Cainiao Boosts Employee Bonuses, Plans Major Incentive Overhaul

Alibaba Group Holding Limited BABA logistics arm Cainiao Smart Logistics Network shared plans to double the year-end bonus for all employees in its next financial year.

Cainiao’s move looks to boost employee sentiments after Alibaba ditched the unit’s initial public offering (IPO). Alibaba and Cainiao chair Joe Tsai echoed similar sentiments in a conference call on Tuesday.

Cainiao braces to launch an “entrepreneurship incentive plan” likely to double the bonus pool for the financial year March 31, 2025, SCMP cites CEO Wan Lin’s internal letter.

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Full-time employees will receive their standard year-end bonus in April 2025 and another equivalent amount in August 2025. 

Cainiao had 14,061 employees as of March 2023, slightly down from 14,375 in 2022. 

Lin’s internal letter focused on expanding key businesses, boosting the global logistics network, and building global competitiveness.

Alibaba is looking to consolidate the integration between its logistics and e-commerce units to regain market share in mainland China and expand its business in international markets, according to Tsai.

Tsai found it an appropriate time to ramp up investment in Cainiao. Alibaba, which currently owns 64% of Cainiao, has offered up to $3.75 billion to buy the remaining stake of minority shareholders, valuing Cainiao at $10.3 billion.

Alibaba is also overhauling employee incentives at its other business units. The new incentive scheme enabled employees to exercise their stock options quarterly instead of annually.

Alibaba remained committed to the geographical diversification of its logistics and e-commerce units and advancing its artificial intelligence endeavors.

The stock has lost 17% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF PGJ and ProShares Online Retail ETF ONLN.

Price Action: BABA shares traded lower by 1.05% at $70.74 premarket on the last check Wednesday.

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