Executives at China Vanke have begun returning portions of their salaries, a move covering the period from 2021 to 2024. This timeframe coincides with a pivotal era for the company: the aggressive takeover attempt by Baoneng, the successful defense led by founder Wang Shi in alliance with Shenzhen Metro, Wang Shi's subsequent departure, the rise of Yu Liang to leadership, and Shenzhen Metro becoming the largest shareholder.
This period marks the boundary between enjoying the industry's upswing and cashing out at the peak. Astute real estate executives recognized the turning point and sought to extract every last cent, employing various schemes with the singular goal of liquidating their positions and exiting. State-owned assets, junior employees, and homebuyers effectively became the ones left holding the bag.
Reports suggest that the retired former Chairman of the Board, Yu Liang, has returned 6 million yuan. The former President, Zhu Jiujiu, who is reportedly under compulsory measures, has returned 17 million yuan, and the former Board Secretary, Zhu Xu, has returned 10 million yuan. While Vanke has officially denied these rumors, where there's smoke, there's fire, and the public largely views the reports as confirmed facts.
For real estate executives, salaries are merely the tip of the income iceberg. The largest portion comes from co-investment schemes, which benefit them at the expense of others, amplified by self-created financial leverage. Over a few years, this has left behind a landscape of unfinished buildings and financially trapped homeowners, while the executives themselves feasted.
Between 2010 and 2016, Vanke accrued over 5 billion yuan in economic profit bonuses, with core executives like Yu Liang, Zhu Jiujiu, and Zhu Xu being the primary beneficiaries. If salary returns were traced back to this period, the scale of repayments would increase exponentially, which might explain the current need to sell off assets.
Since Shenzhen Metro took control, Vanke has increasingly resembled a bottomless pit, with the injection of state-owned capital becoming a frequent topic of public discussion.
If one were to consult the opinions of those currently repaying mortgages, the situation would likely be exposed in its entirety. A carefully worded organizational statement and a gesture of fulfilling one's duty to the times might serve as a form of reputational rehabilitation. A wiser course of action would be to swiftly sell off properties, land, and even luxury items, sever ties with extramarital partners, and do whatever it takes to seize this seemingly civilized opportunity for a graceful exit.
The era bestowed its红利 (dividends), and now the era demands its义务 (duties). A voluntary return of compensation is far more civilized than a violent reckoning. It is prudent to understand the situation, position oneself correctly, tighten one's belt, and endure a period of austerity—it may not be such a bad thing.
If the towering edifice truly collapses, the small safe houses they built for themselves will not withstand the fall. The红利 (dividends) of the era must transform into the义务 (duties) of the era.
Vanke has started. Will Country Garden follow? What about Evergrande, and other defunct property developers? Besides catching cheating spouses, the public's favorite pastime is seeing the mighty fall and their wealth redistributed.
When the dust of an era settles, it lands like a mountain on someone's shoulders, and former real estate executives are no exception. Perhaps the only true dignity is that which one chooses for oneself proactively.
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