China Vanke Co.,Ltd. has announced its compensation plan for 2026. The plan features two key components.
First, it establishes a clear cap, stipulating that performance-based pay cannot exceed 50% of total compensation. Second, it formally introduces mechanisms for withholding and clawing back pay. This process involves reassessing the performance and incentive-based income of certain senior executives, with portions subject to recovery.
Currently, Vanke remains on a path of internal adjustment. Since 2025, following the comprehensive takeover by Shenzhen Metro Group and the formal conclusion of the "Yu Liang era" this year, the company has been navigating changes to seek improvement.
**The Performance Cap** The compensation for Vanke's directors and senior executives consists of a base salary plus performance-based pay. This performance pay is assessed against company operational targets, with its amount determined and disbursed based on the achievement of annual performance indicators and individual contributions.
Vanke's new compensation scheme states that, in principle, the proportion of performance-based pay for senior executives should not be less than 50% of the total comprising base and performance pay. This adjustment is primarily a response to new regulations. In October of last year, the China Securities Regulatory Commission issued the latest "Code of Corporate Governance for Listed Companies," which explicitly states that performance-based pay should not exceed half of total compensation.
Furthermore, amid the ongoing deep industry adjustment, Vanke has also established a tighter linkage between compensation and performance. When the company shifts from profit to loss or sees an expansion of losses compared to the previous fiscal year, the average performance-based pay for directors and senior executives should, in principle, be reduced accordingly.
Pay cuts for Vanke's executives are not a new phenomenon. In 2024, their compensation saw a significant decline. Starting March 28 of that year, former Chairman Yu Liang and President Zhu Jiusheng, who previously had annual salaries exceeding ten million yuan, voluntarily opted to receive a pre-tax monthly salary of 10,000 yuan. In 2025, the total remuneration for Vanke's directors, supervisors, and senior management was 9.421 million yuan, a 92% decrease from the peak of 112.21 million yuan in 2013.
The control over compensation extends further. Like many real estate developers, Vanke has begun formulating its own mechanisms for withholding and clawing back pay. Its "Compensation Management System" outlines several scenarios:
First, when the company is required to restate financial reports due to misstatements such as financial fraud, the performance pay and medium-to-long-term incentive income of directors and senior executives should be promptly reassessed, with any excess payments recovered accordingly.
Second, if a breach of duty causes losses to the company, or if individuals are deemed responsible for illegal activities such as financial fraud, misappropriation of funds, or违规担保, their performance pay and medium-to-long-term incentive income will be reduced or withheld, and any amounts already paid will be fully or partially recovered.
Even before this policy was formally documented, news emerged about Vanke executives being required to return pay. Three months ago, reports indicated that former Board Secretary Zhu Xu was asked to refund his compensation from the past four years. This requirement reportedly applied to all core senior executives over the same period, including former Chairman Yu Liang, who had reportedly begun selling property to prepare for the repayment.
**Navigating Improvement Through Change** Vanke continues on its path of self-adjustment. In January of last year, following Shenzhen Metro's comprehensive takeover, the company swiftly completed a new round of top-level personnel changes. Yu Liang resigned as board chairman, transitioning to executive vice president, while Zhu Jiusheng resigned as president. Concurrently, several core members from Shenzhen Metro Group quickly filled Vanke's top decision-making echelons.
In September, the company undertook its most significant "flattening" reform in nearly two decades. After this adjustment, Vanke's internal organization was divided into three categories: "Group Headquarters," "Regional Companies," and "Business Units." Compared to the previous structure, the Development and Operations Headquarters was dissolved. The original "5+2+2" framework (5 major regional companies, 2 corporate headquarters, 2 directly managed companies) under that department was integrated and adjusted into 16 regional companies. The functions of the Development and Operations Headquarters were directly merged into the group headquarters, enabling direct management of regional companies by the headquarters. In essence, Vanke shifted from its original three-tier "group-region-city" structure to a flatter two-tier control system of "headquarters-city."
The changes did not end there. In October of that year, Xin Jie resigned for personal reasons, and Huang Liping was elected to succeed him as Vanke's chairman, formally stepping into the spotlight. Xin Jie's tenure at the helm of Vanke lasted only nine months.
In January 2026, Yu Liang applied to resign from his positions as director and executive vice president due to reaching retirement age. In March, he stepped down as Vanke's legal representative, with Xin Jie taking over the role. This marked the formal end of the "Yu Liang era" and Vanke's entry into a phase of "comprehensive leadership by Shenzhen Metro."
However, in April of this year, regarding the vacancy in the president role, Vanke stated that the company, through board authorization and adjustments to senior management responsibilities, has distributed the relevant duties among the chairman and the senior management team.
With the support of Shenzhen Metro, Vanke has continued to make progress in debt resolution. For instance, its proposal to extend a 2 billion yuan medium-term note from 2023 recently passed with nearly unanimous approval.
At the performance level, there remains significant room for improvement. In 2025, Vanke achieved operating revenue of 233.43 billion yuan, a year-on-year decrease of 32%. Net profit attributable to shareholders was a loss of 88.56 billion yuan, with the loss amount expanding by 78.98% year-on-year. Contracted sales amounted to 134.06 billion yuan, down 45.5% year-on-year. Throughout the year, it completed the delivery of over 117,000 housing units.
The company's management stated that "resolving the burdens and issues formed by the past development model of high debt, high turnover, and high leverage will still require time."
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