A recent article, which was subsequently taken down following a complaint, made claims about executive compensation and agent income at KE Holdings Inc.. The complaint stated the article's data was "severely inconsistent with the facts." This piece will re-examine these topics using only the company's publicly disclosed financial reports, allowing for verification of the data and providing clarity on the matter.
Since the start of 2025, a series of financial disclosures have brought KE Holdings Inc.'s compensation structure under scrutiny. The explosive growth in management pay, the vast income gap between executives and platform agents, and questions over employee social security compliance are all significant issues worthy of analysis. All data herein is sourced from the company's official annual reports, quarterly filings, and interim reports.
Analysis of Management Compensation
A review of public data reveals a dramatic increase in the total compensation for the board of directors at KE Holdings Inc., rising from RMB 3.265 million in 2015 to RMB 1.266 billion in 2023. This represents a staggering increase of over 387 times in eight years, a growth rate rarely seen in the domestic residential services or broader internet sectors. According to the 2023 annual report, the total compensation for Peng Yongdong reached RMB 713 million, an 83-fold increase from 2021. Of this, approximately 98.3% (RMB 701 million) was attributed to share-based settlement, with cash salary and bonuses amounting to only RMB 12 million.
In an April 2025 public response, the company explained that this substantial compensation stemmed from restricted shares granted to management to meet the requirements of a weighted voting rights structure upon its Hong Kong listing. These are accounted for as compensation using the straight-line amortization method under accounting standards, representing a book value rather than actual cash income. However, a comparison with industry data is telling: the ratio of executive compensation to net profit at international real estate brokerage giant RE/MAX is typically 3%-5%. For KE Holdings Inc. in 2023, this ratio was 29.6%, far exceeding normal industry ranges.
This growth is particularly notable given the broader industry context. After 2021, as China's real estate sector entered a significant adjustment phase, executives at leading developers like Vanke and Country Garden voluntarily reduced their salaries, with some monthly pay falling to around RMB 10,000. In stark contrast, management compensation at KE Holdings Inc. surged against the trend, with total board compensation breaking RMB 850 million in 2022 and climbing further to RMB 1.266 billion in 2023.
The company's Q1 2025 report showed strong business growth, with Gross Transaction Value (GTV) up 34.0% and net revenue up 42.4% year-over-year. However, net profit for 2024 declined by 30.8% to RMB 4.078 billion, while operating costs surged by 25.8%, indicating a "revenue growth without profit growth" phenomenon. The continued record-high management compensation against this backdrop of eroding profits naturally raises questions about the rationality of the allocation structure.
Declining Social Security Coverage for Full-Time Employees
In sharp contrast to the explosive growth in executive pay is the consistent decline in social security coverage for the company's full-time employees. According to its annual social responsibility reports, the social security coverage rate for full-time employees was 81% in 2015. This rate has declined each year, falling to 58% in the first half of 2025. This implies that nearly 42% of full-time employees were not covered by the formal social security system.
In terms of the per capita annual social security contribution base, the figure for 2023 was RMB 70,200, equivalent to only about 62% of the average wage for urban employees in Beijing during the same period, well below the standard required for compliant contributions. Many full-time employees have contributions made at the minimum base rate or not at all, directly impacting their access to pension, medical, and work injury protections.
The company's interim report for 2025 shows that "Accrued Payroll and Welfare" decreased by 37.06% compared to the end of the previous period, and its proportion of total assets fell by 2.04 percentage points. This reduction in accrued employee compensation amid expanding revenue suggests a strategy of containing human resource costs. This juxtaposition of multi-billion-yuan book-value executive compensation and the compression of social security benefits for ordinary full-time employees highlights an internal allocation imbalance.
Income Challenges and Lack of Protections for Platform Agents
As the core service providers on the platform, the livelihood of hundreds of thousands of real estate agents directly impacts service quality and industry stability. The 2023 annual report shows the average annual income for platform agents was RMB 82,200. During the same period, Peng Yongdong's personal compensation was RMB 713 million, creating an income gap exceeding 8,670 times—a disparity rarely seen among leading service companies in China.
From 2015 to 2025, the number of agents on the platform grew from 72,000 to 558,000, an expansion of nearly 7 times. However, the average annual agent income only grew from RMB 32,000 to RMB 85,000, a cumulative increase of less than 165% over the decade, far below the growth rate of company revenue. In Q2 2025, the number of active agents reached 492,000, a 19.5% year-over-year increase, but the semi-annual average income for active agents was only RMB 51,000 (approximately RMB 102,000 annualized). Income growth has not kept pace with platform expansion.
A critical issue is that the vast majority of platform agents are not formal, full-time employees of KE Holdings Inc.. They operate under a franchise model affiliated with platform stores. According to the statistical method in the 2025 interim report, over 90% of the more than 60,000 stores are franchise outlets. These stores typically sign cooperation agreements with agents rather than labor contracts, which directly results in hundreds of thousands of agents being unable to access standard employee social security benefits, leaving their basic rights to work injury, medical, and pension coverage unprotected.
The nature of real estate agency work involves frequent travel for property viewings and long commutes, resulting in a higher risk of traffic accidents and personal injury compared to typical office workers. Without proper work injury insurance, most agents must bear related losses themselves in case of an accident.
Assessing the Rationality of the Allocation System
The core contradiction in the current allocation system at KE Holdings Inc. is essentially an imbalance between capital logic, management interests, and the rights of front-line workers.
First, the accounting treatment of equity incentives is potentially misleading. Booking the amortized value of restricted shares granted at listing as annual compensation creates multi-billion-yuan book-value salaries. While the realization of this value is tied to long-term company performance, its presentation in financial reports as annual pay can mislead public perception of the allocation system and lacks transparency regarding vesting conditions, widening the trust gap between management and front-line personnel.
Second, the special shareholding structure lacks a checks-and-balances mechanism for compensation. According to the disclosed equity structure, Peng Yongdong controls 50.3% of voting rights through Class B shares. This concentration means there is a lack of independent third-party oversight in compensation decisions, allowing them to tilt heavily towards the core management team, with little to no input from ordinary employees or agents on allocation fairness.
Third, the platform-based employment model transfers cost pressure to front-line workers. By converting hundreds of thousands of agents into "cooperating parties" rather than formal employees through the franchise model, the company achieves rapid scale expansion while avoiding significant social security, housing fund, and other human resource costs, effectively shifting business risks onto the agents.
Fourth, the benefits of growth are heavily skewed towards capital and management, with the share of labor compensation declining. From 2015 to 2025, the company's annual revenue grew from under RMB 1 billion to nearly RMB 100 billion, an increase of over 100 times. However, social security coverage for full-time employees has consistently declined, and agent income growth has long lagged behind revenue growth. The vast majority of the value created flows to capital and management, with front-line workers struggling to share in the company's development gains.
Potential Paths Forward
To address these allocation issues, KE Holdings Inc. could consider several steps. Firstly, establishing a more transparent compensation disclosure mechanism is crucial. Clearly disclosing the vesting conditions, lock-up periods, and actual realizable value of management equity incentives to the public would help avoid confusion between accounting figures and real income, reducing misunderstandings arising from information asymmetry.
Secondly, reconstructing the checks-and-balances mechanism for compensation decisions is needed. Introducing independent third-party representatives, including representatives from ordinary employees and front-line agents, into the board's compensation committee would prevent management from unilaterally determining allocation schemes and help institutionalize fairness.
Simultaneously, the platform should gradually optimize the employment model within franchise stores. Establishing a basic protection system for long-serving, active agents and exploring a tripartite social security contribution mechanism shared by the platform, stores, and agents could help safeguard the basic rights of hundreds of thousands of front-line workers and reduce industry-wide turnover.
Finally, the company should establish a compensation adjustment mechanism linked to the industry cycle. Management could proactively adjust their own compensation levels during industry downturns to share difficulties with front-line workers. Only by forming a community of shared interests among the platform, management, full-time employees, and hundreds of thousands of agents, and by building a fairer and more reasonable allocation system, can the industry achieve high-quality, sustainable development.
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