Profit dividend, also known as profit sharing system or labor dividend system, refers to the labor income paid out in the form of dividend at the end of each year when an enterprise first extracts a part of the total profits of the enterprise in proportion to form a "dividend fund", and then determines the distribution amount according to the performance of employees.

The traditional profit sharing system is that enterprises pay dividends to employees at the end of the year. In addition to dividends, the modern sharing system also includes that employees have the right to buy shares of enterprises and own shares of enterprises, and even some employers provide virtual shares to employees, which is called "phantom share plan", and its purpose is to motivate employees to create the best work performance.

please have a look at the introduction here!

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