Ping An Insurance (Group) Co denied its top managers' behemoth income package was linked with its property and casualty affiliate's compulsory vehicle premium.
It's the first time the besieged insurer has responded to reports that 1,055 vehicle insurance policy-holders had accused Ping An of raising policyholders' premiums to supplement its senior management's juicy income package.
The group approached the China Insurance Regulatory Commission with its complaints.
"The senior managers' high package has nothing to do with the compulsory vehicle premium from the property and casualty affiliate as the two companies are independent legal entities with independent cost allocations,'' Ping An said in a statement to the Shanghai Stock Exchange yesterday.
The Shenzhen-based insurer posted its 2007 annual report on March 20, disclosing that its chairman Peter Ma's total income package topped 66 million yuan (US$9.39 million) last year, 20 million of which he donated. Seven other senior managers of Ping An also have a yearly income of more than 10 million yuan.
Ping An senior management team members' multimillion-dollar incomes, together with other listed financial companies' top managers' big packages, ignited complaints that listed financial players' senior managers received millions of yuan while retail investors were losing their fortunes on the mainland stock market where the benchmark Shanghai Composite Index shed about one third this year.
Ping An said the high package was due to the company's rising profits and the option scheme for senior managers.
Ping An went public in Hong Kong in 2004 and its senior management team enjoys the right of selling their holdings, which is offered to them at HK$10.33 (US$1.32) apiece as the issuing price of its H shares.
Its senior managers have had the opportunity to sell such holdings since 2007 and many sold them at a price of HK$52.74, the company said.
Ping An has been in the spotlight since the insurer announced a US$120 billion refinancing plan in late January.
Retail investors complained that Ping An's behemoth refinancing plan was one main reason to crack the already fragile investment confidence, triggering calls to boycott to insurer.
The insurer closed at 57.12 yuan in Shanghai yesterday, down 7.05 percent. The Shanghai Composite Index tumbled 5.5 percent to 3,413.91.
(Shanghai Daily April 10, 2008)
