Who received the huge year-end bonus from TENCENT?

Author: Huang Yu

Editor: Zhang Xiaoling

Every year-end, the year-end bonuses of major companies become a hot topic. As a company that once had huge year-end bonuses, TENCENT is still in the spotlight.

Recently, there have been reports that the year-end bonus for TENCENT's WeChat division can reach up to 30 months' salary, and for the gaming division, it can reach up to 25 months' salary, which can amount to over a million yuan. In an instant, the entire internet was filled with envy.

TENCENT has not responded to this news. However, several TENCENT employees have told Wall Street News that there is a significant difference in year-end bonuses between different business departments, which is a "sensitive topic" internally and colleagues do not discuss it openly. Normally, the year-end bonus ranges from 2 to 6 months' salary, and those with good performance may receive additional rewards.

The rules have never changed, and everything is based on performance. Under this iron law, it can be imagined that the year-end bonuses for TENCENT's gaming and WeChat divisions are relatively high within the group. Last year, both of these businesses achieved good results, which were highlighted by Pony at the annual meeting.

In the end, the year-end bonuses of large companies reflect the performance of their various businesses throughout the year, and the internal divisions are evident. Behind the huge year-end bonuses, this giant TENCENT still faces considerable pressure as a whole.

Otherwise, Ma Huateng would not have said things like "let the best people take the stage" and "don't rest on your laurels".

Differentiation

As the highest-valued internet company in China, TENCENT has always been generous with its year-end bonuses.

According to the Vlink Talent Intelligence "2021-2022 New Economy Company Year-end Bonus Observation Report," TENCENT ranks second with an average year-end bonus of 206,300 yuan. The other two competitors, Alibaba and ByteDance, rank 4th and 9th with year-end bonuses of 170,900 yuan and 149,000 yuan, respectively.

There have been many rumors about TENCENT's year-end bonuses for 2023. The latest news is that the year-end bonus for TENCENT's WeChat division in 2023 is close to the highest in previous years, with the highest tier receiving 30 months' salary, and the general tier receiving 16 months' salary. In the IEG (Interactive Entertainment Group), the highest tier for the "Dream Star" and "Honour of Kings" project teams can receive 25 months' salary, while the general tier can receive 5 months' salary. The lowest tier in other business groups is 3-4 months' salary.

However, many TENCENT employees believe that the general tier is unlikely to be so high. But it is widely recognized internally that the year-end bonuses for WeChat Video and gaming are high.

As we all know, the highlight of TENCENT's year-end bonuses has always been in the gaming business. In previous years, the TENCENT gaming division could receive year-end bonuses equivalent to 24-48 months' salary, and this year, there are rumors that the highest tier can receive up to 25 months' salary.As a pillar business of TENCENT, IEG's year-end bonus is still indispensable this year, especially for employees of the highly profitable game "Honor of Kings" and the future-oriented "Dream Star".

According to rumors, the department with the highest year-end bonus at TENCENT this year is the WeChat Business Group. This may be due to the fact that at the TENCENT annual meeting a week ago, the WeChat team's video platform was specifically praised by Pony Ma, so it is natural that the year-end bonus would not be less.

In response to this, internal employees of TENCENT WeChat expressed that while it is possible for WeChat to have such a high bonus, it is not generally the case, especially since the base salary is far from reaching 70,000 yuan; and the game business may receive more than ten months of bonus.

Of course, not every employee in TENCENT's business units receives such a high year-end bonus. Even within the game business, differentiation is evident. An employee from the core game team of TENCENT IEG revealed that he only received a 3.5-month year-end bonus this year.

Many employees of the video platform also provided feedback that their bonuses were not ideal, as they believed there was a significant gap in product development and operations. "It's also because Pony's speech gave everyone high expectations, but the actual bonus was disappointing."

Employees from TENCENT's cloud and content business also expressed that the entire internet envies the "TENCENT year-end bonus", but with so many businesses under TENCENT, it can only be said that they know the situation best. "Onlookers only see the year-end bonuses of WXG and IEG, but they overlook the fact that they are the core profit-making departments."

Performance

Year-end bonuses are often linked to individual performance, company revenue, and profit levels. Compared to 2021 and 2022, TENCENT is expected to see growth in 2023, and the year-end bonuses are likely to increase as well. However, there is a significant differentiation in year-end bonuses due to the extreme performance differences among TENCENT's various departments.

Some businesses have performed exceptionally well. A year ago, Pony Ma said that WeChat's video platform is the "hope of the entire TENCENT", which was also highlighted in his speech at the annual meeting.

TENCENT's financial report shows that the total video views of the video platform increased by 50% YoY in the third quarter of last year, and advertising revenue also increased significantly.

During the WeChat Open Class at the beginning of the year, the GMV of video platform e-commerce was disclosed. In 2023, the GMV of video platform e-commerce is expected to triple compared to 2022, and the number of orders has increased by 244%+.

To promote the development of e-commerce on the video platform, Pony Ma also stated that this year, TENCENT will fully develop live-streaming e-commerce on the video platform.

The importance of WeChat to TENCENT is self-evident. It is not only the platform with the highest daily active users and the strongest ecosystem, but also the hope for TENCENT to find the next strong growth point.

As the world's largest gaming and social company, nearly 30% of TENCENT's revenue comes from games, which is a moat that TENCENT cannot afford to lose. Game globalization is also seen by Pony Ma as TENCENT's biggest hope for international expansion at present.

In order to attract new and old games, TENCENT has gradually dismantled the "Berlin Wall" between itself and ByteDance, and has successively opened up the live streaming rights of "Honor of Kings" and "Peacekeeper Elite" to Douyin (TikTok).At the annual meeting, Ma Huateng also criticized the gaming business, stating that Tencent Games faced significant challenges in the past year but seemed to have made little progress and cannot rest on its laurels.

"Star of Dreams," which was launched a month and a half ago, is the game that Ma Huateng believes has the most development potential in the future. Tencent has clearly elevated "Star of Dreams" to the strategic level of the group. It is not just a party game to compete with NetEase's "Egg Party," but also a channel for Tencent to seize new social territory.

Compared to WeChat and gaming, Tencent's other businesses have not shown impressive performance. The PCG (Platform and Content Group) is a collection of all of Tencent's old businesses and has been the main sector for cost reduction and efficiency improvement in the past two years. The CSIG (Cloud and Smart Industries Group) has yet to turn a profit, which Ma Huateng described as particularly challenging.

Even so, Ma Huateng has always had a sense of responsibility towards his employees. Unlike many other large companies that are shrouded in the shadow of layoffs, Tencent has not conducted large-scale layoffs in recent years.

He now emphasizes the importance of a small team spirit in management and advises caution in recruitment and personnel decisions. He suggests that small teams should be given a try when things are not clear, and there is no need to rush.

The huge year-end bonus at Tencent is ultimately only received by a few people. The era of internet companies' aggressive expansion is over, and both the atmosphere surrounding year-end bonuses and the cautiousness in recruitment indicate that internet giants are no longer spending money recklessly as they did in the past.

The high year-end bonus was once a symbol of the golden age. Now, including internet giants, more and more companies are passively or actively ending the year-end bonus frenzy. A new era has begun.