In the increasingly severe situation of the real estate industry, Country Garden, the once glorious real estate giant, has also begun to face unprecedented challenges.
On the evening of December 12, Country Garden announced that the company's executive directors Yang Huiyan, Mo Bin, Yang Ziying and non-executive director Chen Chong took the initiative to request a reduction in salary. Among them, Yang Huiyan's annual salary was lowered from 370,000 yuan to 120,000 yuan, and Mo Bin's annual salary was reduced from 3 million yuan to 120,000 yuan.
At the same time, Country Garden also informed that the company has cancelled all executive car allocations. In addition, treatments such as reimbursement of medical examinations for senior executives and free canteens for senior executives have also been abolished. The administrative expenses of the whole group are reduced according to the principle of zero, and no unnecessary expenditures are made, and rigid expenditures are reduced as much as possible through integration and intensification. Overall, Country Garden has cut nearly 60% of its administrative expenses throughout 2023 compared to 2021.
These news have aroused widespread concern from all walks of life, and people can't help but ask: with both senior management salary cuts and significant cuts in administrative expenses, can such drastic changes bring Country Garden back on track?
Some netizens said that this so-called salary cut has no substantive effect, because the income of executives lies in dividends.
The income of senior executives depends on dividends, and the annual salary is only for workers. ”
The annual salary is not worth mentioning at all, if you don't look at Liu Qiangdong, the annual salary is only one dollar, and people are still on the rich list. ”
In the past few years, they have made a lot of money, but now the company is in difficulty, and this kind of salary reduction is just a formality, to show the subordinate employees, so that the employees can be psychologically prepared (bankruptcy, salary reduction or layoff). ”
When to change the salary to total pre-tax income including reimbursements, dividends, benefits, etc., and when to believe this kind of news. ”
Some netizens said that being able to "guarantee the delivery of housing" is better than anything else.
Just keep a low profile and build the house, and don't try all the gimmicks. ”
When people buy a house, what they see is not these, but the delivery of the house!Your Country Garden can guarantee the delivery of the house, which is better than anything else. ”
Some netizens said that executives can reduce their salaries, but they should consider grassroots employees and don't let them take a salary cut.
Whoever is willing to descend will be lowered, and the employees will not be lowered, don't kidnap with morality. ”
Some netizens also said that the whole environment is not good now, and they have to tighten their belts to live.
Country Garden's senior executives cut their salaries and canceled car allocation, which shows that the economic environment is indeed not good. Ordinary people like me can only drink porridge and eat well. ”
From the above, it can be seen that the salary cut of senior executives and the significant reduction of administrative expenses are a strategy for Country Garden to cope with the current predicament. In the context of the cold winter of the real estate industry, many real estate companies are facing problems such as tight capital chain and sales difficulties. As a large-scale real estate enterprise, Country Garden has naturally been greatly affected.
For executives like Yang Huiyan and Mo Bin, their annual salaries are already very impressive. However, their choice to take the initiative to request a lower pay at this time is undoubtedly a form of self-sacrifice and responsibility. They know that their own interests are not the most important, but the interests of the company are the most important. As a result, they choose to sacrifice their own interests to help the company weather the storm.
However, whether executive pay cuts and drastic cuts in administrative overhead can really save Country Garden needs to be considered from a number of aspects.
First of all, although executive salary cuts can reduce the financial pressure on the company, this practice will also have a certain impact on the personal interests and career development of executives. After all, executives are the core talents of the company, and their compensation and career development are closely related. If the company is in trouble for a long time, the personal interests and career development of the executives will also be greatly affected. Therefore, Country Garden needs to balance the personal interests of senior executives and the interests of the company as a whole.
Second, although a significant reduction in administrative overhead can reduce the company's operating costs, whether this practice will affect the company's daily operations and employee benefits is also a question to consider. If Country Garden cuts employee benefits or compromises service quality in order to reduce costs, it will not only affect the company's reputation and image, but also affect the company's long-term development.
In fact, this salary cut and reduction of administrative expenses can be said to be an important reform and adjustment for Country Garden. With this salary cut and administrative overhead cuts, Country Garden can focus more on the company's long-term development rather than short-term benefits.
If this salary cut does not involve grassroots employees, then it can motivate grassroots employees to work harder and contribute to the development of the company.
We have to see the underlying question behind this pay cut, which is when will the winter in the real estate industry end?This is a problem that every real estate company needs to face. It is undeniable that the cold winter in the real estate industry is not just a short-term phenomenon, but a long-term problem. Therefore, on this issue, real estate companies should not simply look forward to the adjustment of policies and changes in the market environment, but should think more deeply and explore the development direction and future trend of the real estate industry.
In addition to the real implementation of the "guaranteed delivery of buildings", Country Garden also needs to focus more on its core business and market positioning, strengthen product innovation and service upgrading, and improve its competitiveness to attract more customers and investors.
In addition, Country Garden really needs to strengthen financial management and risk control. In the context of the cold winter of the real estate industry, many real estate companies are facing problems such as tight capital chain and sales difficulties. Country Garden has strengthened financial management and risk control to ensure the company's financial stability and sustainable development. At the same time, companies also need to actively seek new financing channels and partners to meet the challenges of the market.
Let's wait and see how Country Garden crosses this hurdle.