As China’s insurance market is set to open up more for foreigners, AIA Group 01299.HK) is doing all it can to get prepared, including poaching a top executive from rival Ping An Insurance.
AIA announced Friday that it has appointed Lee Yuan Siong, who is serving Ping An as co-CEO, as its new chief executive and president-designate.
Lee will leave Ping An, China’s largest insurer by market value, from January 31 next year, and will take over the helm at AIA on June 1.
Lee’s compensation package is huge, but the offer is seen as a reflection of AIA Group’s ambitions for the mainland market, as well as mirroring the intensifying rivalry for talent in the industry.
AIA said Lee’s service contract would be for three years, and that the company will have the option to renew for a further three years.
Lee will receive total annual compensation of US$7.03 million, including base salary and numerous incentives provided that targets are reached.
Also, AIA will compensate for Lee’s unvested long-term reward and deferred payment at Ping An. The total value of the compensation is US$28.15 million, which will vest over a period of six years.
At Ping An, Lee is already the highest-paid executive in China’s insurance industry. The huge package AIA offered to woo him away shows how badly the company wants him.
Lee, 54, was born in Singapore. He joined Ping An in 2004 and was promoted to co-CEO in 2010.
He is widely regarded as the key man behind Ping An’s rise to the status of the nation’s top insurer over the last decade, surpassing China Life Insurance (02628.HK) .
AIA’s mainland China business posted a staggering growth of 33 percent last year, making it the second-largest market after Hong Kong.
It’s a sensible move for AIA to hire Lee, who has intimate knowledge about China market, after Beijing announced earlier that it would fully open the insurance sector to foreign insurers next year.
This article appeared in the Hong Kong Economic Journal on Nov 15
Translation by Julie Zhu
[Chinese version 中文版]
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