Kingsoft Cloud Holdings Ltd (KC) saw its stock price plummet by 5.02% during intraday trading on Friday, as investors reacted to the company's latest announcement regarding employee compensation.

The cloud services provider disclosed that it had granted 4,983,520 Restricted Share Units (RSUs) to 164 employee participants under its 2021 Share Incentive Plan. This decision, made on the same day as the stock's decline, is part of Kingsoft Cloud's strategy to align employee interests with those of shareholders. The 2021 Share Incentive Plan, initially adopted in November 2021 and last amended in December 2022, continues to be a key component of the company's employee compensation strategy.

The significant drop in Kingsoft Cloud's stock price suggests that investors may be concerned about potential share dilution resulting from the RSU grant. While such incentive plans are common in the tech industry to attract and retain talent, they can sometimes lead to short-term pressure on stock prices. As Kingsoft Cloud continues to navigate the competitive cloud services market, balancing employee incentives with shareholder interests remains a crucial challenge for the company listed on both the Nasdaq Global Market and the Main Board of the Hong Kong Stock Exchange.