Why is Hu'an Securities' "pay gap" viewed favorably by the market?

Produced by | China Visitor Network

Reviewed by | Li Xiaoyan

In 2025, the A-share market is expected to recover, with the brokerage sector ushering in a performance rebound. Hu’an Securities has become a industry focus due to its impressive financial report. The company’s annual revenue reached 5.07B yuan (up 31.11% year-on-year), net profit attributable to shareholders was 2.11B yuan (up 41.92% year-on-year), total assets surpassed 100 billion yuan to 461.6k yuan, and return on equity rose to 9.11%. Core indicators are leading across the board, demonstrating strong growth momentum and a high-quality development trend.

What is even more noteworthy is that, alongside its soaring performance, Hu’an Securities exhibits a unique pattern of “executive compensation decreasing, employee compensation increasing”: total executive compensation was 8.4189 million yuan, a significant decrease of 29.21% year-on-year; the average salary per employee reached 461.6k yuan, a sharp increase of 30.96% year-on-year, ranking among the top in listed brokerages. This seemingly contradictory phenomenon is not simply a “performance mismatch,” but a rational choice by the company to respond to policy guidance, optimize governance structure, and balance short- and long-term incentives, reflecting the responsibility and long-term planning of a provincial state-owned brokerage.

The reduction in Hu’an Securities’ executive compensation results from multiple positive factors working together, rather than a negative judgment on performance. The brokerage industry generally implements a 3-5 year deferred compensation system. In 2025, the compensation paid mainly corresponds to the industry’s low periods from 2022 to 2024, when the market was sluggish and brokerage performance was under pressure. During that time, Hu’an Securities’ per capita salary fell to a five-year low of 269.4k yuan. The deferred mechanism deeply links executive compensation with long-term performance, effectively avoiding short-term performance impulses and demonstrating the rigidity and seriousness of the compensation system.

In 2025, the company abolished the supervisory board and promoted a flat organizational structure reform, coupled with some senior executives leaving, which objectively lowered the overall compensation total. Meanwhile, in response to compliance and risk control issues that arose during the year, senior management actively took responsibility and had their compensation accordingly reduced, further reinforcing the business philosophy that “compliance is the lifeline.” While repairing internal control vulnerabilities, the company also sent a clear signal of steady operation to the market. As a provincial state-owned enterprise, Hu’an Securities strictly implements the policy of “limit high, expand middle, raise low,” actively controlling management compensation levels. The chairman and CEO’s annual salaries are 718k yuan and 831k yuan respectively, with several vice presidents seeing reductions of over 100k yuan, demonstrating practical actions to promote common prosperity.

Contrasting sharply with the salary cuts for executives, employee compensation saw a significant increase, which is a key measure for the company to empower talent and stimulate endogenous motivation. In 2025, the company’s total staff numbered 3,631, with total compensation increasing by 8.1% year-on-year, more of the performance dividend being directed to grassroots levels. This not only fully rewards frontline staff for market development and customer service efforts but also effectively stabilizes core talent, reducing employee turnover to 9.9%, thus solidifying the human resource foundation for sustainable and steady business growth. Employee per capita salary has increased by over 70% over two years, far exceeding profit growth during the same period. This “focus on grassroots, strong incentives” distribution orientation breaks the traditional pattern of high executive monopoly on development dividends, aligning with the industry’s talent-driven core competitiveness. It significantly enhances team cohesion and overall combat effectiveness. As Anhui’s leading brokerage, Hu’an Securities reduces internal income disparity through “raising low, expanding middle,” directing high-quality resources to frontline and mid-level positions, actively responding to national policy calls, and continuously strengthening the social responsibility image of a state-owned enterprise, achieving an organic unity of business development and social value fulfillment.

From a dialectical perspective, this compensation pattern still has areas for improvement. Overly strict constraints on executive pay may somewhat affect management enthusiasm. Additionally, structural issues such as a high proportion of proprietary trading and relatively small investment banking and asset management scales need ongoing optimization. However, overall, the recent salary adjustments are more beneficial than harmful. From a short-term perspective, the “executive pay cut, employee pay rise” distribution model effectively balances regulatory compliance and internal incentive needs, stabilizes grassroots teams, and constrains short-term profit-seeking behaviors among management, further strengthening operational risk defenses. From a long-term development view, this also marks an important step in the company’s transition from scale expansion to quality improvement. By establishing a prudent and stable compensation system, the company guides the management team to focus on compliance, risk control, balanced business structure, and long-term value creation, rather than merely pursuing short-term performance spikes.

Hu’an Securities’ performance and compensation arrangements in 2025 serve as a high-quality example of state-owned brokerages during a critical period of industry transformation. While experiencing significant growth, the company refrains from blindly increasing executive pay, prioritizing sharing development dividends with ordinary employees during market recovery cycles. This rational approach, which balances action and restraint, not only strictly aligns with regulatory policy guidance but also highly conforms to the logic of sustainable long-term development. In the future, if the company can further build market-oriented incentive mechanisms on the basis of maintaining compliance, continuously optimize its business structure, and stabilize core management teams, Hu’an Securities is expected to leverage this rational governance and sense of responsibility to create a differentiated competitive advantage amid intensifying industry competition, achieving a dual drive of operational performance and corporate governance, and moving toward higher-quality, long-term steady development.