Executives Trained Abroad Are Sought After in China
By Andrew Browne
From The Wall Street Journal Online
When Dominic Leung moved to China this year as chairman of the country’s second-largest life insurer, the Hong Kong executive startled his senior managers with a blunt message: Skip the formalities.
On his first outing to a branch office, the staff formed a welcoming line that snaked from the elevator lobby down a long corridor to the reception counter — the kind of over-the-top gesture that strokes the egos of many Chinese corporate VIPs. But Mr. Leung was embarrassed, and annoyed. “I said to the general manager: ‘You never do that again,’ ” he recalls. ” ‘I don’t need that.’ ”
Mr. Leung, who worked previously for American International Group and the United Kingdom’s Prudential PLC, says he is now trying to persuade managers at Ping An Life Insurance not to greet him personally at the airport. “To me it’s wasting time — they should be working in the office,” he says.
Mr. Leung, a 56-year-old insurance-industry veteran, is part of a new wave of “overseas Chinese” being recruited to fill top slots in Chinese companies. These executives — from Hong Kong, Taiwan, Singapore and other locales where Chinese have settled — have long been wooed by multinationals to run their China operations. Now, some of the brightest are jumping to Chinese companies instead.
In some ways, the trend points to the relative fortunes of Chinese companies in China’s vast domestic economy, where local businesses have proved to be at least the equal of multinationals in the battle for market share. Increasingly, Chinese companies are seen as a springboard for the ambitions of overseas Chinese with U.S. and European graduate degrees in business. Some who have made the leap say they were prompted by a glass ceiling at multinationals for ethnic Chinese employees.
Once the new recruits get over initial culture shock, they report few regrets. Middle-ranking managers who once reported up a chain of command to New York or Frankfurt suddenly find themselves controlling companies that are emerging as national leaders in the world’s fastest-growing major economy.
In a multinational company, “headquarters calls all the shots. But if you work for a Chinese company, you call the shots,” says Zheng Xue-cheng, a corporate search executive with Egon Zehnder International, which recruits high-level talent for Ping An and other Chinese companies.
Corporate perks may be meager in Chinese firms, but pay is competitive and stock options can be generous — in rare cases, sensational. After quitting his job running Microsoft China, Tang Jun, a naturalized U.S. citizen, joined Chinese online gaming company Shanda Interactive Entertainment and picked up 2.6 million stock options now valued at more than $90 million. (The company was listed on the Nasdaq Stock Market this year.)
Tan Wee-Seng, an ethnic Chinese from Malaysia, gave up housing, education and car allowances when he left a senior business role at Reuters news service last year to join Li-Ning Sports, a sportswear company run by a former Chinese Olympic gymnast. “But the options are better,” says Mr. Tan, Li-Ning’s chief financial officer who steered the company through a Hong Kong listing this year.
Another lure: the chance to “help and transform this country,” says Mr. Tan. Ping An’s Mr. Leung says moving to the company gives him a feeling of belonging in China. Working for a multinational “I was an outsider, maybe even a foreigner,” he says. “Now I’m one of them.”
Chinese companies are more open-minded about international recruitment than their counterparts elsewhere in Asia. In part, the openness is driven by necessity: Chinese companies planning to raise capital overseas often lack financial managers with the skills to navigate complex international regulatory and compliance issues.
In some industries, like banking and insurance, Chinese companies face an onslaught of foreign competition as domestic markets open, and they need managers who can implement smart sales and marketing strategies and internal restructuring.
China Construction Bank, one of the country’s Big Four lenders, planning to issue shares next year, has invited a leading Japanese banker to sit on its board of directors — a first for the bank. The Bank of China, also in line to list, is searching overseas to fill positions up to the level of vice president.
Ping An Group, parent of Ping An Life Insurance, has gone further than perhaps any major Chinese company in opening its staff ranks: Half of its top 50 managers come from outside the Chinese mainland, says Sun Jian Yi, the group’s deputy chief executive officer. As a start-up in 1988, Ping An was up against an established state monopoly, the People’s Insurance Co. of China. To compete, it had to look as different from PICC as possible. “We said we wanted to follow the international market,” says Mr. Sun. “We needed overseas money, overseas systems, overseas talent.”
Goldman Sachs Group and Morgan Stanley came in as early private-equity investors. The Shenzhen-based company, which listed just across the border in Hong Kong this year, hired the McKinsey & Co. consultant who drew up the company’s long-term strategy, Louis Cheung.
Mr. Cheung, a 40-year-old Cambridge-educated Hong Kong native, joined Ping An after turning down offers from an international investment bank and a dot-com. Mr. Cheung, 36 when he joined Ping An, says he wanted a company offering super-charged growth, and “China is the only country where you can get that kind of growth.” Now Ping An’s chief operating officer, he shuttles between Shenzhen and Hong Kong, where his wife, a Singaporean investment banker, lives.
For Ping An and other Chinese companies, overseas Chinese are an easier fit than other outsiders. For a start, they can speed-read office memos in Chinese handwriting. But the high-paid recruits can also spark resentments. Ping An runs a two-track pay system. “At first people asked: ‘Why are you paying so much?’ ” says Mr. Sun, who happily admits he earns less than some of the overseas Chinese who work under him. “We had to educate our work force.”
And imported management methods don’t always go down well. Staff at Ping An headquarters are fuming over a new electronic card system at the main door. Employees who leave the building for longer than 30 minutes must explain their absence to a supervisor. “Not even a mosquito can get out of this place without permission,” grumbles a junior manager.
Alan Ku, Ping An’s Taiwan human-resources manager formerly with Unilever, says the system is now being reviewed.