Salary Gap Exists among Executives in China’s Automakers
Executive compensation is a topic of great interest whenever the automobile group releases its annual report. In 2022, Li Auto and Leapmotor’s top three executives received salaries of 123 million yuan ($17.68 million) and 120 million yuan respectively, surpassing their peers with an absolute advantage of over one billion yuan. However, executives at fuel-powered vehicle makers like Haima Automobile and JAC Motors earn less than one million yuan annually.
In 2022, Li Auto spent a total of 123 million yuan on director remuneration, which is a 34% increase from the previous year. The CFO of Li Auto, Li Tie, received 80% of this amount while the CEO, Li Xiang, only received a salary of 1.7 million yuan. Shen Yanan, another senior executive at Li Auto, had an annual salary of 20.87 million yuan.
Li Tie’s salary package exceeds 100 million yuan and comprises a salary and allowance of 2.729 million yuan, a retirement pension of 0.131 million yuan, and stock-based compensation up to 84.64 million yuan. Shen resigned from his role as executive director and president at the end of last year. Although his salary for this year has decreased compared to the previous year’s amount of 87.5 million yuan, he sold one million shares in September last year for over 90 million yuan, which means that his annual income is likely to exceed one billion yuan.
BYD’s net profit in 2022 was 16.6 billion yuan. The three highest-paid executives at BYD are Executive Vice President Li Ke, who received a pre-tax compensation of 9.602 million yuan, Senior Vice President Luo Hongbin with a salary of 8.87 million yuan, and Executive Vice President Lian Yubo with a salary of 8.825 million yuan. It is worth noting that the total pre-tax compensation for BYD founder Wang Chuanfu was only 6.147 million yuan, ranking him sixth among the management team members in terms of pay scale.
Executive salaries at Leapmotor are a significant presence, with Chairman Zhu Jiang’s annual salary increasing by 490.4% year-on-year to 56.361 million yuan and President Wu Baojun’s salary increasing by 12% year-on-year to 43.823 million yuan, while Senior Vice President Cao Li’s compensation is close to 20 million yuan. In September of last year, Leapmotor listed on the Hong Kong Stock Exchange after experiencing a surge in monthly delivery volume to nearly ten thousand vehicles per month and selling 111,200 vehicles in 2022 – a remarkable increase of 154.1% compared to the previous year. This may be an important factor contributing to the rise in executive compensation at Leapmotor.
XPeng made headlines when its CEO’s annual salary exceeded 400 million yuan. However, the company has since implemented cost-cutting measures. The combined salaries of the top three management positions now total only 4.209 million yuan, with Chairman He Xiaopeng earning an annual salary of 1.365 million yuan and co-founder Henry Xia earning 1.332 million yuan per year.
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Based on the published data, executives at Haima Automobile and JAC Motors earn a maximum salary of one million yuan. Zhang Peng, deputy general manager at JAC Motors, earned 913,000 yuan while Li Ming, director and general manager, earned 866,800 yuan. The pre-tax compensation for Jing Zhu (Chairman of Haima Automobile) and Liu Rui (CIO of Haima Automobile) was 900,000 yuan and 521,200 yuan respectively.