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China Merchants Securities. Image provided by IC

Recently, China Merchants Securities (600999.SH) announced that the company's vice president Xiong Kai has applied to resign from the position of vice president of the company for personal reasons. However, China Merchants Securities emphasized that Xiong Kai confirmed that he had no disagreements with the company's board of directors, expressed gratitude to the company's board of directors for its guidance during his tenure, and "will continue to work for the company."

This is not the first personnel change at the senior management level of China Merchants Securities this year. At the end of January this year, Hu Yu, the compliance director and chief risk officer of China Merchants Securities, applied to resign from the company's compliance director and chief risk officer because he was about to reach retirement age. About a month later, China Merchants Securities appointed Zhang Xing as the company's compliance director and chief risk officer.

In addition, the resignation of senior executives in the securities industry has been quite frequent in recent years. Nanduwan Finance reporters found that the reasons for the resignation of senior executives in securities companies generally include "personal reasons", "work adjustments" and "retirement due to age". Among them, "retirement due to age" accounts for a considerable proportion due to factors such as the industry development cycle.

Revenue in the first quarter of this year decreased by 9.66% year-on-year

On August 12, China Merchants Securities announced that the board of directors received a written resignation report from Xiong Kai, the company's vice president, on August 12, 2024. Xiong Kai applied to resign from the position of vice president of the company for personal reasons. According to relevant regulations, Xiong Kai's resignation will take effect from the date the resignation report is delivered to the board of directors.

According to public information, Xiong Kai, 52, has been the vice president of China Merchants Securities since August 2023, just one year ago. After checking the 2023 annual report of China Merchants Securities, a reporter from Wancaishe found that the termination date of Xiong Kai's position as vice president was originally supposed to be December 2024.

Recently, the change of senior management of financial institutions is particularly likely to attract attention from the outside world. However, China Merchants Securities emphasized that Xiong Kai confirmed that he had no disagreements with the company's board of directors, thanked the company's board of directors for its guidance during his tenure, and "will continue to work for the company."

Prior to this, from July 2014 to July 2023, Xiong Kai served successively as General Manager of the Supervision and Security Department, Office Director and General Manager of the Asset Protection Department, President of Zhengzhou Branch, President of Beijing Branch, and Secretary of the Discipline Inspection Commission of the Head Office of China Merchants Bank Co., Ltd. He had served as Deputy Chief Section Member, Chief Section Member, Deputy Director of the Ministry of Public Security, and Researcher, Director, Deputy Director, and Director of relevant departments of the General Office of the Central Committee.

Xiong Kai obtained a bachelor's degree in English from China People's Police University in July 1994, a master's degree in law from China People's University, and a doctorate in legal theory from the Chinese Academy of Social Sciences in July 2002 and July 2011 respectively.

China Merchants Securities has not yet released its semi-annual results for this year, but according to its first-quarter results announcement released on April 26, its revenue in the first quarter of 2024 was approximately 4.299 billion yuan, a year-on-year decrease of 9.66%; net profit attributable to shareholders of listed companies was approximately 2.157 billion yuan, a year-on-year decrease of 4.54%; basic earnings per share was 0.23 yuan, a year-on-year decrease of 4.17%.

Employees were named and punished for large-scale stock speculation

This is not the first personnel change at the senior management level of China Merchants Securities this year. On February 1 this year, China Merchants Securities announced that Hu Yu, the company's compliance director and chief risk officer, would apply to resign from the company's compliance director and chief risk officer on January 31, 2024 due to his upcoming retirement age.

More than a month after disclosing the departure of its chief compliance officer and chief risk officer, China Merchants Securities once again issued an announcement on the appointment of a new chief compliance officer and chief risk officer. On March 5, China Merchants Securities announced that on February 26, the second meeting of the eighth board of directors of the company appointed Zhang Xing as the company's chief compliance officer and chief risk officer. The term of office of the chief compliance officer will be from the date when the appointment is recognized by the securities regulatory authority or the retirement of the original chief compliance officer, whichever is later, to December 31, 2024.

Zhang Xing has worked in China Merchants Securities or its subsidiaries for many years. He has served as Assistant to the President of China Merchants Securities since September 2023, Director of the Risk Management Center of China Merchants Securities since April 2021, Supervisor of China Merchants Futures Co., Ltd. since March 2008, Director of China Merchants Securities Asset Management Co., Ltd. since July 2015, Chief Risk Officer of China Merchants Securities Investment Co., Ltd. since September 2017, Director of China Merchants Securities International Co., Ltd. since January 2019, Head of Risk Management of China Merchants Securities International Co., Ltd. since April 2020, and Chief Risk Officer of China Merchants Zhiyuan Capital Investment Co., Ltd. since September 2020.

However, Zhang Xing's background as compliance director and chief risk officer was not peaceful. Half a month before he took office, China Merchants Securities was heavily fined for large-scale stock speculation by its employees and was named by the China Securities Regulatory Commission.

On February 9, the last day of the Year of the Rabbit, the CSRC website released an announcement in the form of a news release, targeting China Merchants Securities. The announcement stated that the CSRC recently organized inspection and law enforcement and daily supervision forces to investigate and deal with illegal and irregular behaviors such as stock trading by multiple employees of China Merchants Securities. Three-dimensional punishment was carried out through criminal prosecution, administrative penalties, administrative supervision measures, and internal accountability.

Focus on the first generation of securities industry veterans' farewell

From an industry perspective, brokerage firms have seen a high number of senior executives leaving their companies in recent years, and this has been the case in recent times as well.

On July 31, Haitong Securities announced that the board of directors had received the resignation report from Jiang Chengjun, who applied to resign from the position of deputy general manager of the company due to personal reasons. After his resignation, he will no longer hold any position in the company.

On July 17, Caida Securities announced that the board of directors received a "resignation report" submitted by Zhang Yuan, the company's director and deputy general manager, on July 17, 2024. Zhang Yuan applied to resign from the company's director and deputy general manager due to reaching the statutory retirement age, and confirmed that he had no disagreements with the company and the board of directors, and there were no other matters related to his resignation that needed to be brought to the attention of the company's shareholders. After his resignation, Zhang Yuan will no longer hold other positions in the company.

On June 27, Huaxi Securities announced that Zu Qiang, the company's deputy general manager, chief operating officer, and chief information officer, will no longer serve as the company's deputy general manager, chief operating officer, and chief information officer due to reaching retirement age, and will no longer hold any position in the company and its subsidiaries after leaving office. Among them, before the company appoints a new chief information officer, Xing Huaizhu, the company's deputy general manager and compliance director, will act as the chief information officer.

On the same day, Everbright Securities announced that the board of directors had received a resignation report from Fu Jianping, the company's vice president. Due to work adjustments, Fu Jianping resigned from the company's vice president position. After his resignation, Fu Jianping will continue to serve as a member of the company's party committee and secretary of the disciplinary committee.

The reporter of Wancai.com found that the reasons for the resignation of senior executives of securities companies generally include "personal reasons", "work adjustment" and "retirement due to age". Among them, "retirement due to age" accounts for a considerable proportion.

According to the reporter's observation, retirement age is related to the industry development cycle. The securities industry in mainland China has a history of about 30 years, and many heads or senior executives of securities firms are first-generation securities professionals, that is, those who entered the industry in the 1990s, and are now basically approaching retirement age.

However, not all senior executives of securities firms approaching retirement age will resign at retirement age. Only those securities firms that adopt the state-owned asset supervision model have their senior executives forced to retire at a certain age. Currently, the largest shareholders of my country's leading securities firms are mostly state-owned assets.

So, what impact will the first generation of securities industry veterans have on related securities firms after their retirement? The industry believes that for those leading securities firms with a relatively reasonable corporate governance structure, a relatively solid business foundation, and a relatively sufficient talent pool, there will be almost no adverse impact. However, for those small and medium-sized securities firms, it is necessary to pay attention to the potential impact of the alternation of the old and new management teams. Of course, if the new management team is pioneering and enterprising in business and highlights its characteristics, it may also achieve leapfrog development and become a professional and distinctive investment bank.

Written by: Nandu Wancaishe reporter Wang Yufeng