We had lunch together at the company and celebrated this big step forward. Having weathered the storm, things should be going smoothly from now on.
In the afternoon meeting room, the heads of more than a dozen departments were seated. Lu Feng walked in and sat in the head seat, saying, "I'll review the department reports when I have time. This meeting will focus on a few things: First, the financing and overseas business division. Second, regarding the further dilution of employee stock ownership, I believe we should grant more stock options to core members of the R&D company as a reward. Third, the progress of the Tianjin factory and the group headquarters building. Fourth, the discussion on the electrical appliance city project. Fifth, the internal restructuring, upgrading the existing board of directors to a board of trustees, and placing employee stock ownership representatives under the board of trustees!"
After hearing these questions, everyone sighed inwardly at how fast the company was developing. The board of directors could no longer meet the needs of the shareholders and needed to be transformed into a board of directors.
With the entry of international capital, the formation of a board of directors and the election of a rotating president and CEO are only a matter of time, and the title of chairman, which once held absolute power, will soon become history.
In fact, when Schroders was brought in, the senior management was somewhat worried that once the financing was completed, Lu Feng's shareholding would become a single digit, and he would easily be kicked out. However, if the company wanted to grow bigger and go global, it would be impossible not to bring in capital.
Everyone knows about the electronics mall project; it's even written in the prospectus that Jiafeng Electronics will be building the first electronics mall in China.
What surprised everyone the most was that Lu Feng continued to push for the R&D company to gain more influence within the group, which made many senior executives feel uneasy.
After all, he had made great contributions to the company, but in President Lu's eyes, the R&D company was the most precious one.
The previous questions were just brief reports and discussions. The Tianjin factory will be put into use at the beginning of next year, and the group building has also started construction with the arrival of funds. It is expected to be completed by the end of 1995 and put into use in early 1996.
When the topic of further diluting employee stock ownership was brought up, the atmosphere in the meeting room became subtle. Liu Cheng appeared somewhat agitated, but he hid it well.
"Actually, I think the group has done a good job in this regard. However, we have indeed added a lot of heavyweight engineers this year. These teams need some incentives. It is necessary to give them some benefits. It is not about giving special treatment to engineers who are not our own people, but specially hired personnel. Otherwise, we would need to invest a lot of cash flow."
Liu Cheng looked at Lu Feng and said, "President Lu, I think that this time, the additional stock options should not involve the senior management of the R&D company, but should be targeted at key project teams and individuals."
"This is a good suggestion. Everyone, please share your thoughts," Lu Feng asked the group.
Of all those people involved, who wouldn't want to secure some benefits for their department? As the person in charge, Wei Yandan naturally couldn't speak up. Du Guoying wanted to ask the telecommunications company for some equity incentives, but since it was just starting out this year, she was too embarrassed to ask.
After a long silence, Zhu Lidong finally spoke.
"President Lu, the marketing department has a lot of employees now, and everyone is working very hard. Sales have been good in all aspects this year, and sales channels have been opened up in many cities. Could you also issue some equity incentives to some middle-level managers?" Zhu Lidong asked tentatively.
"What does the marketing department need so many equity incentives for? They already have bonuses, and bonuses are enough for middle management. Diluting them too much at once makes them worthless. We'll talk about it next time," Lu Feng said, brushing it off.
Zhu Lidong could only nod in agreement. He knew from the moment he opened his mouth that it was impossible. If President Lu agreed, Du Guoying would immediately ask for it, and if Kevin knew about it, he would definitely ask for it too. In the end, the chicken soup of equity incentives would be diluted into a bowl of water, bland and tasteless.
"Regarding the electronics mall, we have submitted three proposals before, and I have briefly reviewed them all. We don't want it to be too big, just a few hundred square meters will do. We'll put up a big sign outside, the kind with a red light. To put it bluntly, it's just a large specialty store, but we can leave some space to attract other partners to move in. We'll rent the store ourselves, and the partners can try it out for free for the first year. For example, we'll give Nokia a counter."
"First, we will plan and promote in major cities. We need to have a full range of products. The main highlight is one-stop shopping for electrical appliances. It is cheap, affordable, and guaranteed. My idea is to open ten stores next year in prime locations in first-tier cities such as Shanghai, Guangzhou, Shenzhen, and Beijing. This is partly to fulfill the requirements in the IPO prospectus and partly to test the waters. Ten stores won't cost much. Fifty million yuan is enough."
"Should we set up a separate department for this?" Wei Yandan asked, flipping through the folder. "In my opinion, we should set up a supermarket department under the group to operate it, while the advertising and promotion aspects should be managed by the marketing department."
“Okay, let’s operate it as a department for now, and then we can split it up as it grows.” Lu Feng nodded in agreement.
The meeting lasted the entire afternoon, and many issues within the group were discussed. The group's overall framework was sound and its direction was correct; however, some departments and oversight needed to be strengthened, especially regarding the inertia and corruption within the management team.
As evening approached, the meeting finally ended. Lu Feng stood up, stretched, and said to everyone, "I'll treat everyone tonight. Let's get together and celebrate. It's almost the Mid-Autumn Festival, so this is like celebrating early."
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