Lenovo Group, China's largest computer maker, said last Friday it would cut directors' pay by as much as 50% following the company's disappointing performance in the past few years, the Financial Times reported yesterday.
Liu Chuanzhi, Lenovo's chairman, said top managers including Yang Yuanqing, president and chief operating officer, would take a salary cut of between 40 and 50% this year. Lenovo's move comes after it reported in June worse-than-expected results for last year and confessed its performance over the past three years had fallen short of internal targets.
Shares in the company, formerly known as China Legend, have dropped nearly 60% since the start of the year, while analysts at investment banks including ABN Amro and Citigroup's Smith Barney have downgraded the company. Once seen as one of China's most promising companies on the back of strong demand for PCs in China, Lenovo has come under pressure in recent years from aggressive rivals such as Dell and Hewlett-Packard, which have targeted corporate customers, and because of its shrinking margins.