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This Tech Billionaire Is Slashing His Annual Salary to 15 Cents

November 8, 2016

Letv Launches EUI System In BeijingLetv Launches EUI System In Beijing
Jia Yueting holds a press conference for the launching of EUI system on April 14, 2015 in Beijing, China. VCG VCG via Getty Images

Chinese conglomerate LeEco, which has invested in high-tech products from electric cars to smartphones, is facing a shortage of cash and suffering from expanding too fast and in too many directions, its CEO said in a letter to staff.

Jia Yueting, a billionaire who wants to take on global tech giants like Elon Musk’s Tesla Motors (TSLA), said in the letter sent to Reuters that the firm was facing “big company disease” after having expanded at an “unprecedented rate.”

The letter casts a shadow over LeEco‘s bold ambitions in sectors from online entertainment to cars after the relatively unknown tech firm burst on to the Chinese market over the last few years. Jia has been making a big push in overseas markets as well including the United States.

LeEco‘s listed smart TV subsidiary Leshi Internet Information and Technology Beijing fell 4.7% on Monday amid reports of Jia’s comments.

Jia said the firm needed to make sure that its financial arm was able to “catch up to the growing need for cash,” and cautioned that LeEco‘s organizational structure was “lagging behind” the firm’s fast development.

“We are starting to see signs of big company disease, such as low individual performance and organisational redundancies,” Jia said in the letter.

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“In order to realise the rapid and positive growth of the Eco operation, we will cut costs to reinforce the awareness of capital control and efficient operation.”

Jia has previously had to overcome questions about LeEco‘s funding, and whether the firm was spreading itself too thinly.

To help fund LeEco‘s push into electric vehicles, Jia’s sister sold her stake in the company and lent money to him interest-free. Jia himself also sold part of his own stake.

The firm said in August it would invest nearly $2 billion to build an electric car plant in eastern China.

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Jia said in the letter that he and his management team would take “full responsibility” for the situation, and that he would cut his annual salary to a nominal 1 yuan ($0.15).

He also pledged to give more attention to the listed subsidiary, which operates smart TV platform LeTV. He added the firm would look to integrate other parts of the business into the listed unit.