The independent director of Kangmei Pharmaceuticals was sentenced to compensation and caused a chain reaction in 10 days. 25 independent directors of each company have resigned

  Has the third wave of resignation of independent directors in the history of A shares come?

  The resignation of independent directors of listed companies triggered by the first-instance judgment of the Kangmei case has become more and more intense, and there is no sign of ending.

  Independent directors of listed companies seem to be becoming positions where risks are significantly greater than benefits.

  A reporter from the Beijing Youth Daily noted that it is still unclear whether this wave of resignation can evolve into the third wave of resignations of independent directors in the history of A-shares.

event

5 independent directors of Kangmei Pharmaceutical were sentenced

Bear hundreds of millions of joint and several liability

  On November 12, the special representative of Kangmei Pharmaceutical Securities made a first-instance judgment. The result of the judgment showed that Kangmei Pharmaceutical, as a listed company, was liable for compensation of 2.459 billion yuan; the actual controllers of the company, including Ma Xingtian and his wife and Qiu Xiwei, were four Yuan Gao The management personnel organized and planned the implementation of financial fraud and assumed 100% joint liability for compensation; 13 senior executives respectively assumed 20%, 10%, and 5% joint liability for compensation according to the degree of fault.

Guangdong Zhengzhong Zhujiang Certified Public Accountants was sentenced to bear 100% joint and several liability for compensation.

  What shocked the market was that five independent directors (four of them were university professors) were convicted of being jointly and severally liable for civil damages of hundreds of millions of yuan: Jiang Zhenping and Li Ding'an were jointly liable for 20% (equivalent to 491.8 million yuan); Zhang Hong was liable for 10. % Joint liability (equivalent to 245.9 million yuan); Guo Chonghui and Zhang Ping bear 5% joint and several liability (equivalent to 12295 million yuan).

  The four university professors are Li Ding'an (Professor of South China University of Technology), Zhang Hong (Professor of Southwest University of Political Science and Law), Guo Chonghui (Professor of Dalian University of Technology), Zhang Ping (Associate Professor of South China University of Technology).

  The annual remuneration for serving as an independent director in Kangmei Pharmaceutical is only about 100,000 yuan.

However, due to the case of Kangmei Pharmaceutical's financial fraud, each person was sentenced to hundreds of millions of joint damages.

  This lawsuit has sounded a wake-up call for independent directors, and the era of irresponsible remuneration alone has come to an end.

  Independent directors Zhang Ping and Guo Chonghui joined Kangmei Pharmaceutical as independent directors at the same time, but resigned in June 2020 due to personal reasons.

In 2018, 2019, and 2020, the pre-tax remuneration received from Kangmei Pharmaceutical was 70,000 yuan, 120,100 yuan, and 50,900 yuan respectively, with an average annual income of 80,000 yuan, and the judgment required a joint liability of about 123 million yuan.

  In fact, in May 2020, the above five independent directors have been given administrative penalties by the China Securities Regulatory Commission. Among them, Jiang Zhenping and Li Ding'an were fined 200,000 yuan, and Zhang Hong, Guo Chonghui, and Zhang Ping were fined 150,000 yuan.

Independent director Zhang Ping also voluntarily resigned as an independent director in June 2020 after the penalty decision was announced.

As of May 2021, the only independent directors still in office are Jiang Zhenping, Guo Chonghui and Lai Xiaoping.

Influence

24 A-share companies in the last 10 days

25 independent directors have applied for resignation

  The court's judgment on the independent director of Kangmei Pharmaceutical has allowed the entire market to think about the independent director in a deeper level.

It has been 20 years since the introduction of independent directors in A shares in 2001.

Judging from the financial fraud of Kangmei Pharmaceutical, five independent directors were sentenced to joint and several liabilities of more than 100 million yuan. As the independent director system becomes more and more perfect, the corresponding legal risks of independent directors are increasing.

  In the past year, about 60 independent directors of A shares were fined, with a total fine of 4.76 million yuan; in addition, the Shanghai and Shenzhen Stock Exchange also imposed disciplinary sanctions on 110 independent directors.

  After the verdict came to fruition, a wave of "resignations" of independent directors quickly appeared in listed companies.

  On November 20th, a reporter from Beijing Youth Daily found through Juchao Information Network that another 6 listed companies had issued announcements about the resignation of independent directors, namely, Yuxin Technology, Kexin Development, Zhongxin Tourism, Guanghong Technology, and Jinhua Co., Ltd. And Uboxun.

Most of the independent directors of the above-mentioned six listed companies resigned due to personal reasons, and a few were due to the expiration of their term of office or their proposed appointment to other positions in the listed company.

As of press time, another independent director of Jinfu Technology Company has resigned.

  According to incomplete statistics from reporters from Beijing Youth Daily, since November 12, 24 listed companies have issued announcements of the resignation of 25 independent directors.

Among them, most of the independent directors applied for resignation due to personal reasons, which triggered widespread heated discussions in the market.

  According to incomplete statistics, since November, the number of A-share listed companies that announced the resignation of independent directors is 33, a year-on-year increase of 57% and a month-on-month increase of 65%.

  The number of independent directors to resign in 2021 has now set a new high in recent years, exceeding 700.

From 2018 to 2020, the number of independent directors resigned each year was 503, 497, and 679.

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The average salary in 2020 is about 84,000

Independent directors from the college get together listed companies

  The market noticed that in the first-instance judgment of the Kangmei case, the independent director who was previously known as the company's vase suddenly became a high-risk profession.

  So what is the annual average salary of an independent director of an A-share listed company?

  According to statistics from a reporter from Beijing Youth Daily, Wind data shows that the average salary of A-share independent directors in 2020 is about 84,000 yuan.

Among them, the highest salary among A-share independent directors is Junshi Biologics Independent Director Exhibition Ping. In 2020, the total pre-tax remuneration received by Exhibition Ping is approximately RMB 5.4308 million.

  At the end of 2019, the number of independent directors of A-share listed companies reached about 12,000, with a total salary of 944 million yuan, or 81,000 yuan per capita.

Through comparison, it can be found that the annual average salary of A-share independent directors is relatively stable, less than 100,000 yuan.

  The reporter of Beiqing Daily noticed that considering the salary of independent directors in the past three years, the proportion of independent directors with an annual salary of more than 200,000 yuan is about 4%, and the proportion of independent directors between 100,000 and 200,000 yuan is about 25%. Approximately 61% of the annual salary between 40,000 and 100,000 yuan, and about 10% of independent directors have an annual salary of less than 40,000 yuan.

In a broad category of industries, independent directors of financial listed companies have generally higher salaries.

In contrast to the salary of independent directors of listed financial companies, in 2019, for example, nearly 80% of the independent directors of A-share companies have annual salary of less than 100,000 yuan, and even nearly 200 independent directors have salary of 1,000 To 10,000 yuan.

  In an interview, a reporter from the Beijing Youth Daily found that, taking 2017 as an example, the total number of independent directors of A-share listed companies was about 10,856. Excluding changes in the number caused by resignations and resignations during the period, the actual independent directors of A-share listed companies that year The number is about 7,300 people.

  A reporter from the Beijing Youth Daily noted that among the huge group of independent directors, the four major groups including university teachers, industry association leaders, lawyers and accountants have the largest number.

  According to Wind data, the median age distribution of independent directors in 2017 is 54 years old, and those born in the 60s and 70s are the backbone of independent directors.

The oldest independent director is 83 years old, with a total of 6 people, while the youngest independent director is only 32 years old, with 6 people in total.

  Data in 2017 shows that major companies are increasingly inclined to invite people with a master’s degree or above to serve as independent directors. In 2016, the proportion of independent directors accounted for as high as 73%, and 40% of independent directors were doctoral students. , Bachelor degree or below only accounts for 3%.

  Which colleges and universities do the independent directors of A-share listed companies come from?

According to a report from the Beijing Youth Daily reporter, as of December 2, 2015, nearly 9,000 independent director positions have been set up in A-share listed companies, of which nearly 3,000 independent directors are incumbents or former professors of institutions of higher learning Part-time, accounting for nearly 1/3.

The universities where these professors work include nationally renowned universities such as Peking University, Tsinghua University, and Shanghai Jiaotong University, as well as local universities such as Zhejiang University of Finance and Economics and Northwest University of Political Science and Law.

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  The legal risks borne by independent directors continue to rise

  Is the third wave of resignation of independent directors emerging?

  Since the beginning of this year, many independent directors have voted against or abstained from the relevant resolutions of listed companies.

The reason for this phenomenon is that the legal risks borne by independent directors continue to rise.

  Dong Dengxin, director of the Institute of Financial Securities, Wuhan University of Science and Technology, believes that the independent director system is becoming more and more perfect, and the legal responsibilities (become) clear. Many independent directors are not paid high. It is costly to participate in almost all meetings of the board of directors. Legal risks are increasing, and some independent directors have abstained or voted against them in order to protect themselves.

  After all, independent directors and listed companies have an appointment relationship. To pierce this layer of window paper, Dong Dengxin suggested that a third-party expert database of independent director candidates should be established.

A listed company pays independent director fees every year, and the relevant departments uniformly pay the independent directors' remuneration.

Only by cutting off the economic interest relationship between the independent director and the listed company, can the independent director truly realize true independence from personality to economy, exert the independent director's supervision and review duties, and fulfill the legal obligations.

  Since the establishment of the A-share independent director system in 2001, it has experienced 20 years of great development. Before that, it experienced two waves of independent director resignations.

  The first time was a wave of resignations of independent directors.

  On October 19, 2013, the organization department issued the "Opinions on Further Regulating the Part-time (holding) of Party and Government Leading Cadres in Enterprises", requiring all localities to clean up the illegal part-time (holding) of Party and Government leading cadres in enterprises within a time limit.

  At the beginning of July of that year, the relevant person in charge of the organization department issued an "answer to reporter's question" on the above policy, and disclosed that after the "Opinions" was issued, the national Communist Party cleared more than 40,700 person-times of party and government leading cadres in enterprises, including 229 person-times of provincial and ministerial cadres. Shao is the independent director.

  The power of the "Opinions" quickly emerged in 2014, and gradually reached its climax in January, March and May.

According to the statistics of Beiqing Daily reporters, from October 2013 to July 2014, nearly 300 independent directors in Shanghai and Shenzhen have resigned.

  The second time was the resignation of independent directors of universities.

  In early November 2015, the Ministry of Education issued the "Notice of the General Office of the Ministry of Education on the Special Inspection of Part-time Work of Party and Government Leading Cadres in Enterprises", requiring universities to comply with the requirements of the implementation of the organization department's "Document 18" and other documents.

As the "Notice" was communicated at all levels, most schools were required to report the situation in November, which became the most direct fuse for the resignation of independent directors of colleges and universities that began in mid-November.

  Looking at the resignation of independent directors of listed companies in Zhejiang alone, they include Shi Jiayou, associate professor of the School of Law of Renmin University of China, independent director of Powerway Alloy, Yang Bo, deputy dean of the School of Pharmacy of Zhejiang University, independent director of Zuoli Pharmaceutical, and the Department of Law of China Youth University for Political Sciences. Director, Sunlight Lighting Independent Dong Linwei, Deputy Dean of the School of Economics and Trade Management of Zhejiang University of Technology, Du Qunyang, Independent Director of Shuanghuan Transmission, and Zhang Chengrui, Director of the CNC Center of Shandong University School of Mechanical Engineering, and Independent Director of Hongxun Technology.

According to Flush Data, a total of 274 independent directors resigned from November 27 to the end of December of that year.

  Whether the "resignation wave" of A-share independent directors triggered by the Kangmei case can evolve into the third time in the history of A-shares, there is still no clear answer.

  Text/Reporter Liu Shenliang