Ren Zeping's 15 million salary is the same.

Stock Ren Zeping subprime crisis

shanghaizhengquanbao· 2017-12-11 18:40:04

reading: Recently, "Ren Zeping's 15 million salary" news stunned the partners. What are the ways behind the "outrageous" salary? Today we tell us about science. In twenty-first Century ~

Business Review (ID:weixin21cbr), the author

recently walking sail, Hengda 15 million to the annual economic analyst Ren Zeping hired as chief economist, this message is then maxed out my circle of friends.

, though people have been accustomed to the high salaries of financial executives, but this time, the people who eat melon are still stunned by this sky high salary. So how does the company make up the salary of this executive?

actually, for a large number of listed companies, both at home and abroad, executive pay is not a secret. Because, according to the securities regulations, the annual salary of the top ranking top executives of listed companies must be publicly disclosed in the company's financial statements. According to a 2015 statistics from

, the average salary of top 500 executives in the US is 1000 times higher than that of an average American worker.

then why do executives pay more and more? Let's start with the fundamentals of executive compensation:

one, the way to decide executive pay. There are two ways to decide

's salary: internal pricing and external pricing.

internal pricing is to ensure internal equity, compared with the average salary level of sb pay with the organization, not particularly high or low; external pricing is to ensure that salary levels are competitive in the external market, so as to the external market is attractive, but also to avoid their own talent poached by other companies.

while maintaining the internal equity and external competition, except for a few rich nouveau riche enterprises, for most enterprises is quite a challenge.

first, the resources of the enterprise are limited, which determines that the limited resources can only be used first to the most needed places. If the limited salary budget is spread to all employees like pepper, the internal fairness is guaranteed, but it is unfair to a few excellent employees.

then, between the internal fairness and the external competitiveness, the enterprise should be biased toward which side of the balance, usually related to the corporate culture. For example, many state-owned enterprises have implemented the salary limit order, and the top executives of state-owned enterprises have been capped. For those without such restrictions, CEO certainly hope that executive compensation can be aligned with the market, the higher the better.

when a company checks the executive pay level, it usually defines a comparable company group on a small scale, and then matches the post salary of these companies. Most companies will be awarded 50 or 75 points above the approved salary level, that is to say, the salary level of 50% or 75% of the group is higher.

no one wants to keep their benchmarking below 50%, because doing so is equivalent to telling the outside world that my company is rotten, even the industry average level is not enough, so it is difficult for such an enterprise to attract executives to join.

, if everyone is positioning himself to be 50 points or more when making salary, it is also because they themselves are in the original data pool (data pool).

, then, the final result is to pull up the level of the data pool naturally, and then pull up the executive pay above 50 points. In this way, the executive pay is also rising.

two, the composition of executive compensation

executives generally include four parts: wages, short-term incentives, long-term incentives and welfare.

wages and short-term incentives (bonuses) belong to cash pay, and the other employees have these two.

, in many companies, distinguishes executives and ordinary employees from long-term incentives. This is a form of compensation established by employees in order to encourage employees to contribute to long-term performance and interests of the company. The most common ones include stock options and restricted stock.

stock option is equivalent to giving employees a right to buy Future Ltd stock at a fixed price, while restricted stock is equivalent to directly giving shares to employees, but it can really be fulfilled before meeting certain service years and performance.

, besides, many big businesses also have special benefits for executives, such as high-end medical insurance (including family members), vehicles, drivers, extended vacation and so on.

about the way of combination of executive pay, generally speaking, long-term incentive in the total salary accounted for more than 50% of the proportion, wages and bonuses add up to less than 50%.

the following figure from Hewitt compensation consulting firm AON 2016 salary report, it can be seen that China private listed companies average equity compensation accounted for more than 70%, and correspondingly, state-owned enterprises listed equity compensation accounted for only about 20%.

three, executive compensation is related to corporate performance? The reason why

executive compensation is high is that in addition to market benchmarking factors, there is also the hope that high salary can encourage executives to bring greater performance returns to enterprises.

then, those are holding

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