LI AUTO(US:LI) Mei Ri Jing Ji Xin Wen·2025-05-07 10:56Core Viewpoint - The report highlights the significant disparity in executive compensation within the automotive industry, particularly focusing on Li Xiang, CEO of Li Auto, whose reported "annual salary" of 639 million yuan has sparked industry discussions regarding high equity incentives and compensation structures [1][2]. Group 1: Li Auto Executive Compensation - Li Xiang's reported salary consists of a base salary of 2.665 million yuan and an equity incentive triggered by achieving a delivery target of 500,000 vehicles, amounting to over 636 million yuan [1]. - Li Auto clarified that the 639 million yuan figure is an accounting expense under U.S. GAAP and does not reflect actual earnings, as Li Xiang would need to pay 29.26 USD per ADS to realize the incentive, resulting in a potential loss of 32 million USD (approximately 230 million yuan) if executed at current stock prices [1]. - Over the past three years, Li Xiang's base salary has increased from 1.566 million yuan in 2022 to 2.665 million yuan in 2024, indicating a gradual upward trend [5]. Group 2: Industry-Wide Compensation Trends - The high equity incentive model is prevalent among new automotive enterprises, with executives often receiving lower fixed salaries compared to their core management teams [2][6]. - For instance, in 2024, Ma Donghui's salary was 40.274 million yuan, with 61% attributed to equity incentives, while Li Tie's salary was 39.16 million yuan, with 88% from incentives [6]. - This compensation structure reflects the challenges faced by new car manufacturers, which are under pressure from high capital investments and extended profitability cycles, leading to a focus on aligning management incentives with long-term company value [6]. Group 3: Traditional Automotive Companies - Traditional automotive companies tend to adopt more conservative compensation strategies, with examples such as Geely's CEO receiving 32.01 million yuan while the founder's salary was only 376,000 yuan [7]. - In contrast to new car manufacturers, traditional firms often see executive salaries surpassing those of founders, indicating a separation of ownership and management [7]. - Some traditional companies also implement equity incentive models, as seen with BYD's executive vice president earning 16.83 million yuan, with over 60% from equity incentives [8]. Group 4: Differences in Compensation Structures - The differences in compensation strategies between new and traditional automotive companies reflect their strategic positioning and development models, with new firms favoring high equity incentives to drive rapid growth [9]. - Traditional companies utilize a mixed compensation structure of cash and equity to ensure stability and control operational risks, showcasing a differentiated governance strategy based on their respective development stages [9].