Why is Hu'an Securities' "pay inversion" favored by the market?

Ask AI · How does Hu’an Securities’ compensation reform reflect the responsibility and commitment of state-owned enterprises?

Produced by | China Visit Network

Reviewed by | Li Xiaoyan

In 2025, the A-share market is recovering, and the brokerage sector is experiencing a performance rebound. Hu’an Securities has become a industry focus with 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 net assets rose to 9.11%. Core indicators are leading across the board, demonstrating strong growth momentum and high-quality development trends.

What is even more noteworthy is that, amid soaring performance, Hu’an Securities presents a unique pattern: “executive compensation decreases, employee compensation increases”: 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 listed brokerages for growth. 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 binds executive compensation to 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 reform, coupled with the departure of some senior executives, objectively lowering the overall compensation total. Meanwhile, in response to compliance and risk control issues that arose during the year, senior management proactively took management responsibility and had their salaries reduced accordingly, 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 guidance of “limit high, expand middle, and 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 salary reductions of over 100k yuan, demonstrating practical actions to promote common prosperity.

In stark contrast to the salary cuts for executives, employee compensation has increased significantly, 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 is directed toward grassroots employees. 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 strengthening the foundation for sustainable business development. The average employee salary has increased by over 70% over two years, far exceeding profit growth during the same period. This “focus on grassroots, strong incentives” distribution approach breaks the traditional pattern of high management share of 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. Excessively strict constraints on executive pay may impact management enthusiasm to some extent. 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, this compensation adjustment offers more benefits than drawbacks. In the short term, the “executive salary reduction, employee salary increase” distribution model effectively balances regulatory compliance and internal incentive needs, stabilizes grassroots teams, and constrains short-term profit-seeking behaviors of management, further strengthening operational risk defenses. In the long run, it marks an important step in the company’s transition from scale expansion to quality improvement. By establishing a prudent and stable compensation system, it guides the management team to focus on compliance, risk control, balanced business structure, and long-term value creation, rather than merely pursuing short-term high performance.

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 achieving significant performance growth, the company did not blindly raise executive salaries but prioritized sharing development dividends with ordinary employees during market recovery. This rational choice, which balances action and restraint, strictly aligns with regulatory policy guidance and is highly consistent with 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, optimize business structure continuously, 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.